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Endogenous Health Groups and Heterogeneous Dynamics of the Elderly

Author

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  • Dante Amengual

    (CEMFI)

  • Jesus Bueren

    (European University Institute)

  • Julio Crego

    (Tilburg University)

Abstract

We propose a novel methodology to classify individuals into groups of health and characterize their transition across these groups as they age. We use MCMC techniques to estimate a panel Markov switching model that exploits information from both the crosssectional and time series dimensions. Using the Health and Retirement Study, we identify four clearly differentiated and persistent health groups, depending on individual’s physical and mental disabilities, with heterogeneous transitions across gender and education. Our classification outperforms existing measures of health used in the literature at explaining entry in nursing homes, home health care, out-of-pocket medical expenses and mortality.

Suggested Citation

  • Dante Amengual & Jesus Bueren & Julio Crego, 2019. "Endogenous Health Groups and Heterogeneous Dynamics of the Elderly," 2019 Meeting Papers 332, Society for Economic Dynamics.
  • Handle: RePEc:red:sed019:332
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    Cited by:

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    2. Maira Colacce & Julia Córdoba & Alejandra Marroig & Guillermo Sánchez, 2021. "Clases latentes de dependencia en Uruguay," Documentos de Trabajo (working papers) 21-23, Instituto de Economía - IECON.
    3. Martin Garcia-Vazquez, 2021. "Identification and Estimation of Non-stationary Hidden Markov Models," Working Papers 2021-023, Human Capital and Economic Opportunity Working Group.
    4. Siqi Wei, 2022. "Income, Employment and Health Risks of Older Workers," Working Papers wp2022_2205, CEMFI.

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