Working Paper: NBER ID: w10381
Abstract: This paper investigates to what extent the differences in education between black and white men can be explained by the differences in their mortality risks. A dynamic optimal stopping-point life cycle model is examined, in which group-level mortality risk plays an important role in determining individual-level mortality risk, health expenditure,and the amount of schooling. The model is calibrated to quantify the effect of mortality risks on schooling by taking the black and white male population as the respective reference groups for black men and white men. We find that the impact of mortality risk on schooling explains more than two-thirds of the empirical education differences between black and white males. This conclusion is robust to a set of plausible parameter values.
Keywords: Mortality Risk; Educational Attainment; Black Men; White Men; Economic Disparities
JEL Codes: J1; J7
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| mortality risk (J17) | schooling (I21) |
| mortality risk (J17) | educational attainment (I21) |
| higher mortality risks for black men (I12) | fewer years of schooling (I21) |
| mortality risks of reference group (I12) | individual mortality risk (J17) |
| individual health expenditure (H51) | individual mortality risk (J17) |