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Socio-Economic Status, Health Shocks, Life Satisfaction and Mortality: Evidence from an Increasing Mixed Proportional Hazard Model

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  • Frijters, Paul

    (London School of Economics)

  • Haisken-DeNew, John P.

    (Melbourne Institute of Applied Economic and Social Research)

  • Shields, Michael A.

    (Monash University)

Abstract

The socio-economic gradient in health remains a controversial topic in economics and other social sciences. In this paper we develop a new duration model that allows for unobserved persistent individual-specific health shocks and provides new evidence on the roles of socio-economic characteristics in determining length of life using 19-years of high-quality panel data from the German Socio-Economic Panel. We also contribute to the rapidly growing literature on life satisfaction by testing if more satisfied people live longer. Our results clearly confirm the importance of income, education and marriage as important factors in determining longevity. For example, a one-log point increase in real household monthly income leads to a 12% decline in the probability of death. We find a large role for unobserved health shocks, with 5-years of shocks explaining the same amount of the variation in length of life as all the other observed individual and socio-economic characteristics (with the exception of age) combined. Individuals with a high level of life satisfaction when initially interviewed live significantly longer, but this effect is completely due to the fact that less satisfied individuals are typically less healthy. We are also able to confirm the findings of previous studies that self-assessed health status has significant explanatory power in predicting future mortality and is therefore a useful measure of morbidity. Finally, we suggest that the duration model developed in this paper is a useful tool when analyzing a wide-range of single-spell durations where individual-specific shocks are likely to be important.

Suggested Citation

  • Frijters, Paul & Haisken-DeNew, John P. & Shields, Michael A., 2005. "Socio-Economic Status, Health Shocks, Life Satisfaction and Mortality: Evidence from an Increasing Mixed Proportional Hazard Model," IZA Discussion Papers 1488, Institute of Labor Economics (IZA).
  • Handle: RePEc:iza:izadps:dp1488
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    Cited by:

    1. Eiji Yamamura, 2011. "Differences in the effect of social capital on health status between workers and non-workers," International Review of Economics, Springer;Happiness Economics and Interpersonal Relations (HEIRS), vol. 58(4), pages 385-400, December.
    2. Frijters, Paul & Ulker, Aydogan, 2008. "Robustness in health research: Do differences in health measures, techniques, and time frame matter?," Journal of Health Economics, Elsevier, vol. 27(6), pages 1626-1644, December.
    3. Schneider, Julia & Beblo, Miriam, 2010. "Health at work - indicators and determinants : a revised literature and data review for Germany," IAB-Discussion Paper 201017, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
    4. Christopher J. Boyce & Andrew J. Oswald, 2012. "Do people become healthier after being promoted?," Health Economics, John Wiley & Sons, Ltd., vol. 21(5), pages 580-596, May.
    5. Mevlude Akbulut-Yuksel, 2014. "Children of War: The Long-Run Effects of Large-Scale Physical Destruction and Warfare on Children," Journal of Human Resources, University of Wisconsin Press, vol. 49(3), pages 634-662.
    6. Johnston, David W. & Propper, Carol & Shields, Michael A., 2009. "Comparing subjective and objective measures of health: Evidence from hypertension for the income/health gradient," Journal of Health Economics, Elsevier, vol. 28(3), pages 540-552, May.
    7. Wenshu Gao & Russell Smyth, 2010. "Health Human Capital, Height and Wages in China," Journal of Development Studies, Taylor & Francis Journals, vol. 46(3), pages 466-484.
    8. Andrew M. Jones & Stefanie Schurer, 2011. "How does heterogeneity shape the socioeconomic gradient in health satisfaction?," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 26(4), pages 549-579, June.
    9. René Böheim & Käthe Knittler & Helmut Mahringer, 2008. "Einfluss von Erwerbslaufbahn und Nachtschwerarbeit auf die Lebenserwartung. Sterberisiko der Männer der Kohorten 1924 bis 1949 in Österreich," WIFO Studies, WIFO, number 31719, June.
    10. Deborah A. Cobb‐Clark & Stefanie Schurer, 2013. "Two Economists' Musings on the Stability of Locus of Control," Economic Journal, Royal Economic Society, vol. 0, pages 358-400, August.
    11. S. Balia, 2007. "Reporting expected longevity and smoking: evidence from the SHARE," Working Paper CRENoS 200705, Centre for North South Economic Research, University of Cagliari and Sassari, Sardinia.
    12. Débora Godoy-Izquierdo & Raquel Lara Moreno & María Vázquez Pérez & Francisco Araque Serrano & Juan Godoy García, 2013. "Correlates of Happiness Among Older Spanish Institutionalised and Non-Institutionalised Adults," Journal of Happiness Studies, Springer, vol. 14(2), pages 389-414, April.
    13. Rablen, Matthew D. & Oswald, Andrew J., 2007. "Mortality and Immortality," The Warwick Economics Research Paper Series (TWERPS) 785, University of Warwick, Department of Economics.
    14. Hostenkamp, Gisela & Stolpe, Michael, 2008. "The social costs of health-related early retirement in Germany: Evidence from the German Socio-economic panel," Kiel Working Papers 1415, Kiel Institute for the World Economy (IfW Kiel).
    15. R. Veenhoven, 2008. "Healthy happiness: effects of happiness on physical health and the consequences for preventive health care," Journal of Happiness Studies, Springer, vol. 9(3), pages 449-469, September.
    16. Lelkes, Orsolya, 2008. "Happiness over the life cycle: exploring age-specific preferences," MPRA Paper 7302, University Library of Munich, Germany.
    17. Cobb-Clark, Deborah & Schurer, Stefanie, 2011. "Two economists’ musings on the stability of locus of control," Working Paper Series 1619, Victoria University of Wellington, School of Economics and Finance.

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    More about this item

    Keywords

    mortality; income; education; marriage; life satisfaction; shocks; duration analysis;
    All these keywords.

    JEL classification:

    • I1 - Health, Education, and Welfare - - Health
    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models

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