Population Council Policy Research Division Working Paper no. 197. The objectives of this study are threefold: (1) to examine whether socioeconomic status disparities in health are found in non-Western settings; (2) to assess whether socioeconomic status gradients in health endure into older ages; and (3) to evaluate the direction of causality between health and socioeconomic status. Using data from multiple waves of two longitudinal panel studies of older adults: the Survey of Health and Living Status of the Elderly in Taiwan (1993, 1996, 1999) and the Beijing Multidimensional Longitudinal Study of Aging (1992, 1994, 1997), the paper employs structural equation models to test hypotheses concerning cross-lagged and reciprocal influences between economic well-being and health. Findings provide evidence for reciprocal effects of economic well-being and health among older adults in both Taiwan and Beijing. Those with higher levels of economic well-being have lower levels of functional limitation over time, and those with higher levels of functional limitation have lower levels of economic well-being over time. Consistent with studies based in the United States and Europe, findings from Asia indicate economic differentials in functional health among older adults, highlighting the wider applicability of these associations across settings with very different systems of health care and stratification. Results underscore the importance of considering reciprocal influences in studies of socioeconomic status and health.