Working Paper: NBER ID: w12830
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.
Keywords: health; education; dynamic model; interdependence; policy implications
JEL Codes: C61; I12
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| education (I29) | current health status (I12) |
| health expenditure (H51) | current health status (I12) |
| previous health status (I12) | current health status (I12) |
| health status (I12) | mortality rate (J11) |
| health status (I12) | wage (J31) |
| health status (I12) | home production (D13) |
| health status (I12) | academic success (I24) |
| sick before age 21 (I12) | education (I29) |
| health expenditure subsidies (H51) | educational attainment (I21) |