Estimating Interdependence between Health and Education in a Dynamic Model

57 Pages Posted: 12 Jan 2007 Last revised: 24 Jul 2010

See all articles by Li Gan

Li Gan

Texas A&M University - Department of Economics; National Bureau of Economic Research (NBER)

Guan Gong

University of Texas at Austin - Department of Economics

Date Written: January 2007

Abstract

This paper investigates to what extent and through which channels that health and educational attainment are interdependent. A dynamic model of schooling, work, health expenditure, and savings is developed. The structural framework explicitly models two existing hypotheses on the correlation between health and education. The estimation results strongly support the interdependence between health and education. In particular, the estimated model indicates that an individual's education, health expenditure, and previous health status all affect his health status. Moreover, the individual's health status affects his mortality rate, wage, home production, and academic success. On average, having been sick before age 21 decreases the individual's education by 1.4 years. Policy experiments indicate that a health expenditure subsidy would have a larger impact on educational attainment than a tuition subsidy.

Suggested Citation

Gan, Li and Gong, Guan, Estimating Interdependence between Health and Education in a Dynamic Model (January 2007). NBER Working Paper No. w12830. Available at SSRN: https://ssrn.com/abstract=956869

Li Gan (Contact Author)

Texas A&M University - Department of Economics ( email )

5201 University Blvd.
College Station, TX 77843-4228
United States

National Bureau of Economic Research (NBER) ( email )

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Guan Gong

University of Texas at Austin - Department of Economics ( email )

Austin, TX 78712
United States

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