Dentalnomics

My AFR op-ed today is on dental care.
The Economics of a Smile, Australian Financial Review, 14 June 2011

The smile is one of the great puzzles of evolutionary psychology: why should people indicate pleasure by showing their teeth? Among chimps, a silent bared-teeth display is used to appease dominant members of the troop. But humans are the only species that also use smiles to signal happiness.

Yet what if the sight of your teeth makes people recoil? A 2006 New York Times article quoted Laurie Abbott, a 51 year-old diabetic lost all her teeth and could not afford to replace them. ‘Since I didn't have a smile,’ she said, ‘I couldn't even work at a checkout counter.’

Tooth decay begins when bacteria – fed by mouth sugars – eats through the enamel. As writer Malcolm Gladwell describes it, the cavity blossoms as it enters the dentin. When it hits the centre of the tooth, an insistent throbbing begins and the tooth starts to turn brown. Left unchecked, the tooth eventually becomes soft enough that a dentist can scoop parts away with a hand tool. Tooth decay has been described as one of the worst pains imaginable.

Some people say that the only reason they began abusing alcohol or hard drugs was to get momentary relief from their aching teeth. Dental problems can have other knock-on effects too. When your teeth are hurting, you’re less likely to have a good night’s sleep or eat fresh fruit – potentially compounding other health problems.

Although plenty of researchers have speculated about the relationship between dental health and earnings, few studies have been able to demonstrate causality. The poor are less likely to see a dentist, so it’s hard to know whether tooth decay causes poverty – or whether it is simply a marker of disadvantage.

In ‘The Economic Value of Teeth’, Columbia University economists Sherry Glied and Matthew Neidell use an incisive strategy to bite into the problem. Across the United States, the decision to fluoridate was driven primarily by local politics, not the initial quality of people’s teeth. The researchers find if you grew up drinking fluoridated water, you were more likely to have all your teeth as an adult (the subjects in their study grew up before fluoridated toothpaste or supplements became commonplace).

Using this natural experiment, Glied and Niedell then go on to analyse earnings. They find that women who drank fluoridated water during childhood earn more than women who did not, with the effect concentrated among those from the most disadvantaged backgrounds (puzzlingly, the researchers found no impact on men’s wages). The impacts are large, with the researchers estimating that losing a tooth costs the typical woman 3% percent of her hourly wage – largely because of consumer and employer discrimination. Bad teeth may be one reason why economists have documented a clear relationship between physical beauty and wages.

Such research implies that one way of reducing earnings inequality would be to improve dental care for low-income people Australians. Yet the historic trend has been in the opposite direction. In a recent paper, Sydney University’s Edmund FitzGerald and coauthors look at whether people had visited a dentist in the previous 12 months. They find that among teens from affluent households, the share who saw a dentist has stayed steady about three-quarters of the population since the 1970s. But among the poorest teens, the share that saw a dentist dropped from 56 percent in 1977 to 33 percent in 2005.

Given the evidence on how much teeth matter for earnings, it’s vital for policy to help fill the gaps.

One solution would be to stop asking low-income and middle-income Australians to fund the dental care of the rich. Under the 30 percent Private Health Insurance rebate, the taxpayer pays nearly one-third of a millionaire’s dental bill. This inequity is one reason that we are moving to put a means test on the rebate – a reform that has so far been blocked by the Opposition.

At the same time, the government is moving to improve public dental care by closing a poorly-targeted federal dental program to fund one that’s targeted at low-income households, and by funding more internships in public dentistry.

If we were creating a national health insurance system from scratch today, there would be a good case for it to cover dental care. But given the system we’ve inherited, getting from here to there would be an operation akin to pulling out all the teeth and replacing them with a set of dentures. Fixing the cavities is likely to be a better option.

Andrew Leigh is the federal member for Fraser.

I couldn't manage to work in Bryan Caplan's blog post on the topic, but highly recommend it nonetheless.

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