Education-health relationship: New evidence from a distributional perspective

Using data from the Survey of Health, Ageing and Retirement in Europe (SHARE), this paper identifies the education gradient in health and explores its underlying factors using a distributional approach. We start by constructing a separate health distribution for two education subgroups - the lower and higher educated - and compare the difference in the level of health between them at each point of the distribution. As a next step, we perform a semi-parametric decomposition exercise to explore which factors lie behind the observed health differential. In line with previous studies we find that, on average, higher educated people enjoy better health than those who are lower educated. We show, however, that the difference is not constant along the health distribution, with the gap being several times bigger at the top of the distribution than at its bottom. We also find that around 65 percent of the health gap between the lower and higher educated can be explained by the subgroup differences in demographic, labor market, and behavioral characteristics.