Wealth and Health in South Africa
GATE Working Paper Series WP 1911
23 Pages Posted: 17 Apr 2019
Date Written: March 13, 2019
In this paper, we investigate the impact of wealth on health in South Africa using the National Income Dynamics Study (NIDS). We estimate a two-stage probit model with inheritance as an instrumental variable for wealth. We find no significant effect of wealth on health at the individual level, consistent with most of the results found for developed countries. Alternative specifications to the health outcomes (self-reported health versus reported diseases) as well as the introduction of gifts as an additional instrumental variable delivers similar results. In addition, we decompose wealth into liquid and illiquid wealth. Despite the health effect being higher for liquid than for non-liquid wealth, none of these measures involve substantial or significant effects on health.
Keywords: Wealth, Health, Inheritance, South Africa
JEL Classification: C26, D31, I14, I15
Suggested Citation: Suggested Citation