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Estimating Interdependence Between Health and Education in a Dynamic Model

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  • Li Gan
  • Guan Gong

Abstract

This paper investigates to what extent and through which channels that health and educational attainment are interdependent. A dynamic model of schooling, work, health expenditure, and savings is developed. The structural framework explicitly models two existing hypotheses on the correlation between health and education. The estimation results strongly support the interdependence between health and education. In particular, the estimated model indicates that an individual's education, health expenditure, and previous health status all affect his health status. Moreover, the individual's health status affects his mortality rate, wage, home production, and academic success. On average, having been sick before age 21 decreases the individual's education by 1.4 years. Policy experiments indicate that a health expenditure subsidy would have a larger impact on educational attainment than a tuition subsidy.

Suggested Citation

  • Li Gan & Guan Gong, 2007. "Estimating Interdependence Between Health and Education in a Dynamic Model," NBER Working Papers 12830, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:12830
    Note: AG CH HE LS
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    References listed on IDEAS

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    1. Berkovec, James & Stern, Steven, 1991. "Job Exit Behavior of Older Men," Econometrica, Econometric Society, vol. 59(1), pages 189-210, January.
    2. Li Gan & Guan Gong, 2004. "Mortality Risk and Educational Attainment of Black and White Men," NBER Working Papers 10381, National Bureau of Economic Research, Inc.
    3. Currie, Janet & Madrian, Brigitte C., 1999. "Health, health insurance and the labor market," Handbook of Labor Economics,in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 50, pages 3309-3416 Elsevier.
    4. Keane, Michael P & Wolpin, Kenneth I, 1994. "The Solution and Estimation of Discrete Choice Dynamic Programming Models by Simulation and Interpolation: Monte Carlo Evidence," The Review of Economics and Statistics, MIT Press, vol. 76(4), pages 648-672, November.
    5. Kenkel, Donald S, 1991. "Health Behavior, Health Knowledge, and Schooling," Journal of Political Economy, University of Chicago Press, vol. 99(2), pages 287-305, April.
    6. Anthony A. Smith, Jr. & Michael Keane, 2004. "Generalized Indirect Inference for Discrete Choice Models," Econometric Society 2004 North American Winter Meetings 512, Econometric Society.
    7. Gan, Li & Gong, Guan & Hurd, Michael & McFadden, Daniel, 2015. "Subjective mortality risk and bequests," Journal of Econometrics, Elsevier, vol. 188(2), pages 514-525.
    8. Cameron, Stephen V & Heckman, James J, 1993. "The Nonequivalence of High School Equivalents," Journal of Labor Economics, University of Chicago Press, vol. 11(1), pages 1-47, January.
    9. Grossman, Michael, 1972. "On the Concept of Health Capital and the Demand for Health," Journal of Political Economy, University of Chicago Press, vol. 80(2), pages 223-255, March-Apr.
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    Cited by:

    1. Margarida Chagas Lopes, 2012. "Education, Development and Knowledge: New Forms of Unequal Change Under Globalization – The Case of SSA Countries," The IUP Journal of Knowledge Management, IUP Publications, vol. 0(2), pages 45-60, April.
    2. Capatina, Elena, 2015. "Life-cycle effects of health risk," Journal of Monetary Economics, Elsevier, vol. 74(C), pages 67-88.
    3. Driouchi, Ahmed & Boboc, Cristina & Zouag, Nada, 2009. "Interdependencies of Health, Education and Poverty: The Case of South Mediterranean Economies/Interdependencias de salud, educación y pobreza: el caso de las Economías Sur-Mediterráneas," Estudios de Economía Aplicada, Estudios de Economía Aplicada, vol. 27, pages 523-544, Agosto.

    More about this item

    JEL classification:

    • C61 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Optimization Techniques; Programming Models; Dynamic Analysis
    • I12 - Health, Education, and Welfare - - Health - - - Health Behavior

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