Wages and the Demand for Health - A Life Cycle Analysis
University College London; Institute for Fiscal Studies (IFS); Centre for Economic Policy Research (CEPR)
University of Bristol - Department of Economics; University of Bristol - Leverhulme Centre for Market and Public Organisation (CMPO); Institute for Fiscal Studies (IFS) - Centre for Microdata Methods and Practice
IZA Discussion Paper No. 171
This paper presents a life cycle model for the demand for health, and derives empirical specifications that distinguish between permanent and transitory wage responses. Using panel data, we estimate dynamic health and health input demand equations. We find evidence of negative transitory wage effects, and positive permanent effects. Estimation results based on our life cycle framework lead to very different conclusions than those based on static cross section analyses that are common in the literature. The analysis emphasises the importance to analyse health related behaviour in a dynamic life cycle context.
Number of Pages in PDF File: 50
JEL Classification: C23, D91, I12working papers series
Date posted: November 9, 2000
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