Guaranteed Anual Income

Date:         15 March 16
By:             Frank Gue, B.Sc., MBA, P.Eng
                   Burlington          9o05 634 9538
For:           Howard Elliott, The Spec
Re:             Guaranteed Annual Income

Dear Howard:

Your editorial notes that life expectancy in affluent neighborhoods is 21 years higher than in poor neighborhoods, and ascribes that to income differences.  You suggest that this supports the proposal for a Guaranteed Annual Income (GAI).
Close correlation between these two variables, income and life expectancy, does not prove that income affects life expectancy.  It is equally possible that both are driven by some third influence.  A very good case can be made that this third influence is educational level.  Note:
*  In a recent year, Canadian university graduates earned more than double the earnings of those with no high school, and were 22% less likely to be unemployed, according to Statistics Canada.   This suggests that educated Canadians live much better and are more secure than the uneducated, and are presumably happier.
*  Americans have found that the life expectancy at age 25 is 60 years for men with University degrees but only 44 years for men with no high school.  The same figures are not available for Canada; but our figures would be similar owing to strong similarities between our two countries’ education systems and cultures.
* 44% of Canadians in prison in 2010/2011, the latest year available, had not completed high school.
So, as mentioned above, correlation does not prove causation: but statisticians recognize that, when several correlations all point the same way, they probably do indicate causation.
So there you have it: Education is a main contributor* to a long, well paid, happy life spent out of jail!

Remaining Years of Life for U.S. Adults at Age 25 by Educational Attainment, 2005

education and mortality

Source: Brian L. Rostron et al., “Education Reporting and Classification on Death Certificates in the United States,” Vital and Health Statistics Series 2, no. 151 (2010): 1-16.


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