France Portrait () (Vrije Universiteit Amsterdam) Rob Alessie () (Faculty of Economics and Business Administration, Vrije Universiteit Amsterdam) Dorly Deeg () (Vrije Universiteit Medical Center)
Abstract
Disentangling age, period, and cohort effects in explaining health trends is crucial to assess future prevalences of health disorders. The identification problem -- age, period, and cohort effects are perfectly linearly related -- is tackled by modeling cohort and period effects using lifetime macro-indicators. This approach -- innovative in analyses on health trends -- handles the identification problem and explains mechanisms underlying cohort and period effects. The modeling approach is compared with graphical and two-factors methods. The methods are applied on Dutch trends in functional limitations using data from the Longitudinal Aging Study Amsterdam. We argue that the modeling approach is a highly appropriate alternative. We find that the prevalence of functional limitations increases in the nineteen-nineties due to adverse cohort and period effects. Cohort effects are explained by hygienic and socio-economic conditions during childhood and period effects by restrictions in availability of health care services.
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Find related papers by JEL classification: I1 - Health, Education, and Welfare - - Health C4 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics
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