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Heterogeneity, State Dependence and Health

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  • Timothy J. Halliday

    ()
    (Department of Economics, University of Hawaii at Manoa
    John A. Burns School of Medicine, University of Hawaii at Manoa)

Abstract

This paper investigates the evolution of health over the life-cycle using the Panel Study of Income Dynamics. We allow for two sources of persistence: unobserved heterogeneity and state dependence. The former is modeled by discrete “types.” Estimation indicates that there are at least four types suggesting that there is a large degree of heterogeneity governing health dynamics. We find that the degree of state dependence is near unity for over half of the population. The implications of these findings are twofold. First, health inequalities in adulthood have antecedents in childhood. Second, policies that improve health care and its delivery may be an effective means of mitigating the gradient.

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File URL: http://www.economics.hawaii.edu/research/workingpapers/WP_07-16R.pdf
File Function: First version, 2007
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Bibliographic Info

Paper provided by University of Hawaii at Manoa, Department of Economics in its series Working Papers with number 200716.

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Length: 31 pages
Date of creation: 11 Jul 2007
Date of revision:
Handle: RePEc:hai:wpaper:200716

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Keywords: Health; Dynamic Panel Data Models; Gradient;

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