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Wages and the demand for health - a life cycle analysis

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  • Christian Dustmann

    (Institute for Fiscal Studies and University College London)

  • Frank Windmeijer

    (Institute for Fiscal Studies and University of Bristol)

Abstract

This paper presents a life cycle model for the demand for health, and derives empirical specifications that distinguish between permanent and transitory wage responses. Using panel data, we estimate dynamic health and health input demand equations. We find evidence of negative transitory wage effects, and positive permanent effects. Estimation results based on our life cylce framework lead to very different conclusions than those based on static cross section analyses that are common in the literature. This analysis emphasises the importance to analyse health related behaviour in a dynamic life cycle context.

Suggested Citation

  • Christian Dustmann & Frank Windmeijer, 2000. "Wages and the demand for health - a life cycle analysis," IFS Working Papers W99/20, Institute for Fiscal Studies.
  • Handle: RePEc:ifs:ifsewp:99/20
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    References listed on IDEAS

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    Cited by:

    1. Ana Llena‐Nozal & Maarten Lindeboom & France Portrait, 2004. "The effect of work on mental health: does occupation matter?," Health Economics, John Wiley & Sons, Ltd., vol. 13(10), pages 1045-1062, October.
    2. Wei Zheng & Patrick Paul Walsh, 2018. "Air pollution and health - A provincial level analysis of China," Working Papers 201819, Geary Institute, University College Dublin.
    3. Laura Blow & Andrew Leicester & Frank Windmeijer, 2005. "Parental income and children's smoking behaviour: evidence from the British Household Panel Survey," IFS Working Papers W05/10, Institute for Fiscal Studies.
    4. Andersson, Frederik & Konrad, Kai A., 2001. "Globalization and human capital formation [Globalisierung und Humankapitalinvestitionen]," Discussion Papers, Research Unit: Market Processes and Governance FS IV 01-01, WZB Berlin Social Science Center.
    5. Christopher J. Ruhm, 2006. "Macroeconomic Conditions, Health and Mortality," Chapters, in: Andrew M. Jones (ed.), The Elgar Companion to Health Economics, chapter 1, Edward Elgar Publishing.
    6. Gabriel A. Picone & Frank Sloan & Justin G. Trogdon, 2004. "The effect of the tobacco settlement and smoking bans on alcohol consumption," Health Economics, John Wiley & Sons, Ltd., vol. 13(10), pages 1063-1080, October.
    7. Dave, Dhaval M. & Kelly, Inas Rashad, 2012. "How does the business cycle affect eating habits?," Social Science & Medicine, Elsevier, vol. 74(2), pages 254-262.
    8. Zhao, Zhong, 2005. "Analysis of Health and Longevity in Oldest-Old Population: A Health Capital Approach," IZA Discussion Papers 1877, Institute of Labor Economics (IZA).
    9. Christopher Ruhm, 2007. "A healthy economy can break your heart," Demography, Springer;Population Association of America (PAA), vol. 44(4), pages 829-848, November.
    10. Zhao, Zhong, 2005. "Health Determinants in Urban China," IZA Discussion Papers 1835, Institute of Labor Economics (IZA).
    11. Xu, Xin, 2013. "The business cycle and health behaviors," Social Science & Medicine, Elsevier, vol. 77(C), pages 126-136.

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    More about this item

    JEL classification:

    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • D91 - Microeconomics - - Micro-Based Behavioral Economics - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making
    • I12 - Health, Education, and Welfare - - Health - - - Health Behavior

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