Efficiency of Health Investment: Education or Intelligence?

53 Pages Posted: 11 Jan 2015

See all articles by Govert E. Bijwaard

Govert E. Bijwaard

Netherlands Interdisciplinary Demographic Institute (NIDI); Erasmus University Rotterdam (EUR) - Erasmus School of Economics (ESE); IZA Institute of Labor Economics

Hans van Kippersluis

Erasmus University Rotterdam (EUR) - Erasmus School of Economics (ESE)

Date Written: January 9, 2015

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) ill (in hospital), 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.

Keywords: Education, Intelligence, Health, Multistate duration model

JEL Classification: C41, I14, I24

Suggested Citation

Bijwaard, Govert and van Kippersluis, Hans, Efficiency of Health Investment: Education or Intelligence? (January 9, 2015). Available at SSRN: https://ssrn.com/abstract=2547546 or http://dx.doi.org/10.2139/ssrn.2547546

Govert Bijwaard (Contact Author)

Netherlands Interdisciplinary Demographic Institute (NIDI) ( email )

P.O. Box 11650
NL-2502 AR The Hague
Netherlands
+31 70 3565224 (Phone)

Erasmus University Rotterdam (EUR) - Erasmus School of Economics (ESE) ( email )

P.O. Box 1738
3000 DR Rotterdam, NL 3062 PA
Netherlands

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

Hans Van Kippersluis

Erasmus University Rotterdam (EUR) - Erasmus School of Economics (ESE) ( email )

Burg. Oudlaan 50
Rotterdam, NL 3062 PA
Netherlands

Here is the Coronavirus
related research on SSRN

Paper statistics

Downloads
39
Abstract Views
375
PlumX Metrics