Earnings Effects of Household Investment in Health in Colombia
This study considers the links between primary indicators of health and individual labor productivity in Colombia and explores how additional public expenditures on health may improve individuals' health. Sample statistics how that illness occurs more frequently for women than for men, for less educated than for more educated, for rural than urban residents, and for older individuals. The well educated are considerably taller than those without schooling (6 cm. for males and 4 cm. for females). The empirical evidence confirms that health indicators are related to individual earnings in Colombia. A Mincerain log-earnings equation that includes health indicators as a form of human capital in addition to schooling is specified. When the morbidity variable is treated as endogenous and measured with error and the model is estimated by instrumental variables [IV], it becomes significant and has the expected negative sign. Controlling for age, education, sector of employment, gender and geographic location, an increase by 50% on the average number of days an individual was ill and unable to do his ordinary activities in the last month would imply reductions in labor earnings of 11% for urban males, 8% for urban females, 13% for rural males and 7% for rural females. The estimations with height show a positive sign and high significance even without the IV correction, but the coefficients increased with IV methods by an order of magnitude. Having one more centimeter of stature would increase urban female earns by 4.7% and urban male earnings by 12%. Individual's wealth and living in a community with better health provision indicators are linked with better health outcomes. An analysis of the returns to schooling shows that schooling captures part of the effect of health on productivity when the health indicator is not included in the Mincer equation.
|Date of creation:||Nov 1999|
|Date of revision:|
|Contact details of provider:|| Postal: PO Box 8269, New Haven CT 06520-8269|
Phone: (203) 432-3610
Fax: (203) 432-3898
Web page: http://www.econ.yale.edu/
More information through EDIRC
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Behrman, Jere R. & Deolalikar, Anil B., 1988. "Health and nutrition," Handbook of Development Economics, in: Hollis Chenery & T.N. Srinivasan (ed.), Handbook of Development Economics, edition 1, volume 1, chapter 14, pages 631-711 Elsevier.
- Schultz, T-P, 1996.
"Wage and Labor Supply effects of Illness in Cote d'Ivoire and Ghana : Instrumental Variable Estimates for Days Disabled,"
757, Yale - Economic Growth Center.
- Schultz, T. Paul & Tansel, Aysit, 1997. "Wage and labor supply effects of illness in Cote d'Ivoire and Ghana: instrumental variable estimates for days disabled," Journal of Development Economics, Elsevier, vol. 53(2), pages 251-286, August.
- Strauss, J. & Thomas, D., 1995. "Empirical Modeling of Household and Family Decisions," Papers 95-12, RAND - Reprint Series.
- Behrman, Jere R., 1993. "The economic rationale for investing in nutrition in developing countries," World Development, Elsevier, vol. 21(11), pages 1749-1771, November.
- Heckman, James, 2013.
"Sample selection bias as a specification error,"
Publishing House "SINERGIA PRESS", vol. 31(3), pages 129-137.
- Thomas, D. & Strauss, J., 1997.
"Health and Wages: Evidence on Men and Women in Urban Brazil,"
97-05, RAND - Reprint Series.
- Thomas, Duncan & Strauss, John, 1997. "Health and wages: Evidence on men and women in urban Brazil," Journal of Econometrics, Elsevier, vol. 77(1), pages 159-185, March.
- Strauss, John & Thomas, Duncan, 1995. "Human resources: Empirical modeling of household and family decisions," Handbook of Development Economics, in: Hollis Chenery & T.N. Srinivasan (ed.), Handbook of Development Economics, edition 1, volume 3, chapter 34, pages 1883-2023 Elsevier.
When requesting a correction, please mention this item's handle: RePEc:egc:wpaper:810. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Louise Danishevsky)
If references are entirely missing, you can add them using this form.