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The Role of Health Status on Income in China

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  • Xie, Ruizhi
  • Awokuse, Titus O.

Abstract

The economic benefits from improving health status are obvious, yet there remains a lack of agreement on how to quantify and compare the benefits and the accompanied costs. In our study, we extend Liu et al. (2008)’s study on the role of health status on income in China and examine whether their conclusions still hold under new specifications and in a broader time horizon. Our results show a larger impact of health status on income after replacing household income with individual income. We find this effect becomes even more pronounced in the 2000s. Moreover, our results show an inverted-U relationship between age and income, which is an improvement over Liu et al. (2008)’s work and is in line with other empirical studies. By admitting the endogeneity issue, we find the impact of health status becomes even larger after instrumenting health status. The results of GMM estimation, which allows for efficient estimation under heteroskedasticity of unknown form, are consistent the IV estimations.

Suggested Citation

  • Xie, Ruizhi & Awokuse, Titus O., 2013. "The Role of Health Status on Income in China," 2013 Annual Meeting, August 4-6, 2013, Washington, D.C. 151137, Agricultural and Applied Economics Association.
  • Handle: RePEc:ags:aaea13:151137
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    Keywords

    Health; Income; China; CHNS; Consumer/Household Economics; Health Economics and Policy; I10; I12; J24;

    JEL classification:

    • I10 - Health, Education, and Welfare - - Health - - - General
    • I12 - Health, Education, and Welfare - - Health - - - Health Behavior
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity

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