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Efficiency of health investment: education or intelligence?

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  • Bijwaard, G.
  • van Kippersluis, H.

Abstract

In this paper we hypothesize that education is associated with a higher efficiency of health investment, yet that this efficiency advantage is solely driven by intelligence. We operationalize efficiency of health investment as the probability of dying conditional on a certain hospital diagnosis, and estimate a multistate structural equation model with three states: (i) healthy, (ii) hospitalized, and (iii) death. We use data from a Dutch cohort born around 1940 that links intelligence tests at age 12 to later-life hospitalization and mortality records. The results suggest that higher intelligence induces the higher educated to be more efficient users of health investment - intelligent individuals have a clear survival advantage for most hospital diagnoses - yet for unanticipated health shocks and diseases that require complex treatments such as COPD, education still plays a role.

Suggested Citation

  • Bijwaard, G. & van Kippersluis, H., 2015. "Efficiency of health investment: education or intelligence?," Health, Econometrics and Data Group (HEDG) Working Papers 15/12, HEDG, c/o Department of Economics, University of York.
  • Handle: RePEc:yor:hectdg:15/12
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    References listed on IDEAS

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    1. 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.
    2. Kenkel, D.S., 1989. "Should You Eat Breakfast? Estimates From Health Production Functions," Papers 9-90-8, Pennsylvania State - Department of Economics.
    3. Bijwaard, Govert E. & van Kippersluis, Hans & Veenman, Justus, 2015. "Education and health: The role of cognitive ability," Journal of Health Economics, Elsevier, vol. 42(C), pages 29-43.
    4. Lange, Fabian, 2011. "The role of education in complex health decisions: Evidence from cancer screening," Journal of Health Economics, Elsevier, vol. 30(1), pages 43-54, January.
    5. Gabriella Conti & James Heckman & Sergio Urzua, 2010. "The Education-Health Gradient," American Economic Review, American Economic Association, vol. 100(2), pages 234-238, May.
    6. Gabriella Conti & James J. Heckman & Sergio Urzua, 2010. "Early endowments, education, and health," Working Papers 2011-001, Human Capital and Economic Opportunity Working Group.
    7. Adriana Lleras-Muney, 2005. "The Relationship Between Education and Adult Mortality in the United States," Review of Economic Studies, Oxford University Press, vol. 72(1), pages 189-221.
    8. Goldman Dana P & Lakdawalla Darius N., 2005. "A Theory of Health Disparities and Medical Technology," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 4(1), pages 1-32, September.
    9. Pilar García-Gómez & Hans van Kippersluis & Owen O’Donnell & Eddy van Doorslaer, 2013. "Long-Term and Spillover Effects of Health Shocks on Employment and Income," Journal of Human Resources, University of Wisconsin Press, vol. 48(4), pages 873-909.
    10. Costas Meghir & Mårten Palme & Emilia Simeonova, 2013. "Education, Cognition and Health: Evidence from a Social Experiment," NBER Working Papers 19002, National Bureau of Economic Research, Inc.
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    Cited by:

    1. repec:eee:ehbiol:v:30:y:2018:i:c:p:130-149 is not listed on IDEAS
    2. Bijwaard, G.E.; & Tynelius, P.;, 2018. "The impact of mental problems on mortality and how it is moderated by education," Health, Econometrics and Data Group (HEDG) Working Papers 18/16, HEDG, c/o Department of Economics, University of York.
    3. repec:spr:eujhec:v:20:y:2019:i:1:d:10.1007_s10198-017-0950-2 is not listed on IDEAS

    More about this item

    Keywords

    education; intelligence; health; multistate duration model;

    JEL classification:

    • C41 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - Duration Analysis; Optimal Timing Strategies
    • I14 - Health, Education, and Welfare - - Health - - - Health and Inequality
    • I24 - Health, Education, and Welfare - - Education - - - Education and Inequality

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