Modeling Multi-State Health Transitions in China: A Generalized Linear Model with Time Trends
ARC Centre of Excellence in Population Ageing Research (CEPAR) Working Paper No. 2017/10
21 Pages Posted: 22 May 2017 Last revised: 28 Aug 2017
Date Written: May 12, 2017
Rapid population aging in China has urged the need to understand health transitions of older Chinese to assist the development of social security programs and financial products aimed at funding long-term care. In this paper, we develop a new flexible approach to modeling health transitions in a multi-state Markov model that allows for age effects, time trends and age-time interactions. The model is implemented in the generalized linear modeling framework. We apply the model to evaluate health transitions of Chinese elderly using individual-level panel data from the Chinese Longitudinal Healthy Longevity Survey for the period 1998–2012. Our results confirm that time trends and age-time interactions are important factors explaining health transitions in addition to the more commonly used age effects. We document that differences in disability and mortality rates continue to persist between urban and rural older Chinese. We also compute life expectancies and healthy life expectancies based on the proposed model as inputs for the development of aged care and financial services for older Chinese.
Keywords: generalized linear models (GLMs), health transitions, multi-state model, long-term care, healthy life expectancy, China
JEL Classification: J11
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