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The Evolution of Health over the Life Cycle

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  • Roozbeh Hosseini
  • Karen A. Kopecky
  • Kai Zhao

Abstract

We construct a unified objective measure of health status: the frailty index, defined as the cumulative sum of all adverse health indicators observed for an individual. First, we show that the frailty index has several advantages over self-reported health status, particularly when studying health dynamics. Then we estimate a stochastic process for frailty dynamics over the life cycle. We find that the autocovariance structure of frailty in panel data strongly supports a process that allows the conditional variance of frailty shocks to increase with age. Our frailty measure and dynamic process can be used by researchers to study the evolution of health over the life cycle and its economic implications.

Suggested Citation

  • Roozbeh Hosseini & Karen A. Kopecky & Kai Zhao, 2019. "The Evolution of Health over the Life Cycle," FRB Atlanta Working Paper 2019-12, Federal Reserve Bank of Atlanta.
  • Handle: RePEc:fip:fedawp:2019-12
    DOI: 10.29338/wp2019-12
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    3. Hosoya, Kei, 2023. "Impact of infectious disease pandemics on individual lifetime consumption: An endogenous time preference approach," Journal of Macroeconomics, Elsevier, vol. 76(C).
    4. Tianxu Chen, 2019. "Can Health Savings Account Reduce Health Spending?: Evidence from China," Working papers 2019-08, University of Connecticut, Department of Economics.
    5. Tom Zawisza, 2023. "Retirement Pensions and Disability Insurance for the 21st Century," Working Papers wp455, University of Michigan, Michigan Retirement Research Center.
    6. Svetlana Pashchenko & Ponpoje (Poe) Porapakkarm & Mariacristina De Nardi, 2017. "The Lifetime Costs of Bad Health," 2017 Meeting Papers 533, Society for Economic Dynamics.
    7. Schünemann, Johannes & Strulik, Holger & Trimborn, Timo, 2022. "Optimal demand for medical and long-term care," The Journal of the Economics of Ageing, Elsevier, vol. 23(C).
    8. Scott, Andrew J., 2023. "The economics of longevity – An introduction," The Journal of the Economics of Ageing, Elsevier, vol. 24(C).
    9. FUKAI Taiyo & ICHIMURA Hidehiko & KITAO Sagiri & MIKOSHIBA Minamo, 2021. "Medical Expenditures over the Life Cycle: Persistent Risks and Insurance," Discussion papers 21073, Research Institute of Economy, Trade and Industry (RIETI).
    10. Otsu, Yuki & Yuen, C.Y. Kelvin, 2022. "Health, crime, and the labor market: Theory and policy analysis," Journal of Economic Dynamics and Control, Elsevier, vol. 144(C).
    11. Umesh Ghimire, 2020. "The Impact of Health on Wealth: Empirical Evidence," Working papers 2020-19, University of Connecticut, Department of Economics.
    12. Plassard, Romain, 2022. "Diagnosing unemployment: the dual project of the ENSAE's band," MPRA Paper 113584, University Library of Munich, Germany.
    13. Ana Lucia Abeliansky & Holger Strulik, 2023. "Health and aging before and after retirement," Journal of Population Economics, Springer;European Society for Population Economics, vol. 36(4), pages 2825-2855, October.
    14. Dragone, Davide & Strulik, Holger, 2020. "Negligible senescence: An economic life cycle model for the future," Journal of Economic Behavior & Organization, Elsevier, vol. 171(C), pages 264-285.
    15. White, Matthew N., 2023. "Self-reported health status and latent health dynamics," Journal of Health Economics, Elsevier, vol. 88(C).
    16. Chiara Dal Bianco, 2023. "Disability Insurance and the Effects of Return-to-work Policies," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 49, pages 351-373, July.
    17. Strulik, Holger, 2021. "Intertemporal choice with health-dependent discounting," Mathematical Social Sciences, Elsevier, vol. 111(C), pages 19-25.
    18. Abeliansky, Ana Lucia & Erel, Devin & Strulik, Holger, 2019. "Aging in the USA: Similarities and disparities across time and space," University of Göttingen Working Papers in Economics 384, University of Goettingen, Department of Economics.
    19. Kelly, Mark & Kuhn, Michael, 2022. "Congestion in a public health service: A macro approach," Journal of Macroeconomics, Elsevier, vol. 74(C).
    20. Chiara Dal Bianco, 2023. "Disability Insurance and the Effects of Return-to-work Policies," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 49, pages 351-373, July.

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    More about this item

    Keywords

    health; frailty index; life cycle profiles;
    All these keywords.

    JEL classification:

    • C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models
    • I10 - Health, Education, and Welfare - - Health - - - General
    • I14 - Health, Education, and Welfare - - Health - - - Health and Inequality

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