NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

Estimating Interdependence Between Health and Education in a Dynamic Model

Li Gan, Guan Gong

NBER Working Paper No. 12830
Issued in January 2007
NBER Program(s):   AG   CH   HE   LS

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.

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Document Object Identifier (DOI): 10.3386/w12830

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