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Limited Life Expectancy, Human Capital and Health Investments

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  • Emily Oster
  • Ira Shoulson
  • E. Ray Dorsey

Abstract

Human capital theory predicts that life expectancy will impact human capital attainment. We estimate this relationship using variation in life expectancy driven by Huntington disease, an inherited neurological disorder. We compare investments for individuals who have ex-ante identical risks of HD but differ in disease realization. Individuals with the HD mutation complete less education and job training. The elasticity of demand for college attendance with respect to life expectancy is around 1.0. We relate this to cross-country and over-time differences in education. We use smoking and cancer screening data to test the corollary that health capital responds to life expectancy.

Suggested Citation

  • Emily Oster & Ira Shoulson & E. Ray Dorsey, 2013. "Limited Life Expectancy, Human Capital and Health Investments," American Economic Review, American Economic Association, vol. 103(5), pages 1977-2002, August.
    • Handle: RePEc:aea:aecrev:v:103:y:2013:i:5:p:1977-2002
    Note: DOI: 10.1257/aer.103.5.1977
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    References listed on IDEAS

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    More about this item

    JEL classification:

    • I11 - Health, Education, and Welfare - - Health - - - Analysis of Health Care Markets
    • I12 - Health, Education, and Welfare - - Health - - - Health Behavior
    • I20 - Health, Education, and Welfare - - Education - - - General
    • I31 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - General Welfare, Well-Being
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity

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