Health Inequality, Education and Medical Innovation

Health inequalities across socio-economic groups in the US are large and have been growing. We hypothesize that, as in other, non-health contexts, this pattern occurs because more educated people are better able to take advantage of technological advances in medicine than are the less educated. We test this hypothesis by relating education gradients in mortality to a measure of medical innovation -- the number of active drug ingredients available to treat a disease. We use the Mortality Detail Files and SEER cancer data to estimate consistent causal effects of education on mortality, using compulsory schooling laws in the earlier part of the 20th century as our measure of education. We find that more educated individuals have a larger survival advantage in those diseases where there has been more medical progress. These effects are greater for more recent progress than for older progress, supporting the hypothesis that gradients emerge at the time of innovation.