Economist Deb DeGraff Studies Effects of Mexico’s Aging Population

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Deb DeGraff, professor of economics

Bowdoin Professor of Economics Deborah DeGraff is exploring a world of new data coming out of a groundbreaking study in Mexico.

Starting in 2001, the Mexican Health and Aging Study, financed by the National Institute on Aging, part of the National Institutes of Health, has been following thousands of Mexicans aged 50 and older. This is the longest study on older people ever launched in a developing country, and is an important undertaking because Mexicans are now living longer, leading to a rapidly growing population of elderly citizens.

Over the past 14 years, MHAS has repeatedly returned to its subjects to interview them on their health, employment, education, family, finances, and other aspects of their lives. The study’s data is available to economists, social scientists, public health researchers and others who can help make sense of how this demographic shift is impacting households across the country.

With her research partner, Rebeca Wong, a professor at the University of Texas Medical Branch and MHAS’s principal investigator, DeGraff has been analyzing data from the study. The two economists, who have already published two papers together on Mexico’s aging population, have a National Institutes of Health grant to launch a new research project this year. For the first part of this project, they will look at the income and assets of older people, how these have changed over the 15 years of the study, and how their composition differs from those found in wealthier countries.

DeGraff has throughout her career studied the intersection of microeconomics and demographic dynamics, mostly in developing economies. While her earlier research focused on women in their reproductive years and on children, she has in the past decade become interested in older people. “A large percentage of the world’s population resides in developing countries that are experiencing rapid aging, yet, largely owing to a lack of data, little is known about the economic well-being of the elderly in such societies,” she notes in a research proposal.

Previous Aging Research
Deborah DeGraff and Rebeca Wong have already collaborated on two published papers about Mexico’s elderly. “Old-Age Wealth in Mexico: The Role of Reproductive, Human Capital, and Employment Decisions,” published in Research on Aging in 2009, focuses on how the decisions Mexicans make early in life — such as on how many children to have, the education they provide to their children, and the work they pursue — affect wealth in old age. The other paper, published in The Journal of the Economics of Ageing in 2014, looks at how wealth in old age in Mexico is affected by the age at which people marry and the level of their education. This paper’s research included an important methodological component regarding the statistical techniques used to estimate such models, a novelty that helped the project receive funding.

An interesting finding from Wong and DeGraff’s research is that old-age financial wealth in Mexico is more closely associated with family and education than with employment decisions over a lifetime.

DeGraff said she and Wong expect to find in the first part of their analysis that income for older individuals in Mexico comes less from institutional safety nets, such as social security or pensions, and more from the support of other family members and their own income from labor.

Wong and DeGraff will then look at “how and to what extent the health conditions of these individuals, over the period of study, impact their income and asset holdings later in life,” DeGraff explained. In a developing country, people often need to continue working well  into their advanced years, and an illness and declining health can be detrimental to their finances.

As Mexicans age into their 70s, 80s and 90s, their ability to earn wages will likely decline, threatening a slide into poverty or deeper poverty. This would exacerbate already significant inequality in the country, which is a documented pattern in industrialized nations. “We expect those dynamics to be even more pronounced in a developing country that has fewer social institutions or widely available good healthcare, and where people are more dependent on income earnings,” DeGraff said.

Alternatively, while poor health might put an elderly person at risk for poverty in a country that lacks robust social welfare and financial institutions, Mexico’s greater emphasis on familial support for the elderly “may render health status less important to economic position in old age,” DeGraff said.

DeGraff’s research will shed light on the welfare, and the struggles, of some of Mexico’s most vulnerable people. For that reason, and also for the larger economic and social implications of an aging population, the Mexican Health and Aging Study and the research that comes from it are of policy relevance in Mexico. Growing inequality in “a still relatively poor country does slow down economic development and growth, because you have a large segment of the population that is not in a position to be consuming or producing much,” DeGraff argued.

She added, “One hopes that one’s research has influence.”

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