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The Human Capital Model of the Demand for Health
TL;DR: In this paper, a detailed treatment of the human capital model of the demand for health is presented. But the model is not a complete one, and it does not account for the gap between health as an output and medical care as one of many inputs into its production.
Abstract: This paper contains a detailed treatment of the human capital model of the demand for health. Theoretical predictions are discussed, and theoretical extensions are reviewed. Empirical research that tests the predictions of the model or studies causality between years of formal schooling completed and good health is surveyed. The model views health as a durable capital stock that yields an output of healthy time. Individuals inherit an initial amount of this stock that depreciates with age and can be increased by investment. The household production function model of consumer behavior is employed to account for the gap between health as an output and medical care as one of many inputs into its production. In this framework the shadow price' of health depends on many variables besides the price of medical care. It is shown that the shadow price rises with age if the rate of depreciation on the stock of health rises over the life cycle and falls with education if more educated people are more efficient producers of health. An important result is that, under certain conditions, an increase in the shadow price may simultaneously reduce the quantity of health demanded and increase the quantities of health inputs demanded.
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TL;DR: This article examined whether education has a causal impact on health and found that it has a large and positive correlation between education and health, and that this effect is perhaps larger than has been previously estimated in the literature.
Abstract: Prior research has uncovered a large and positive correlation between education and health. This paper examines whether education has a causal impact on health. I follow synthetic cohorts using successive U.S. censuses to estimate the impact of educational attainment on mortality rates. I use compulsory education laws from 1915 to 1939 as instruments for education. The results suggest that education has a causal impact on mortality, and that this effect is perhaps larger than has been previously estimated in the literature. Copyright 2005, Wiley-Blackwell.
958 citations
TL;DR: In this article, the relationship between education and health can be interpreted causally, or both may be determined by common unobserved factors such as individual time preferences, and they add to the primarily US-based evidence by using a Danish panel data set of employed persons, and use Danish school reforms to instrument education effects on self-reported health (SRH), body mass index (BMI) and an indicator for never been smoking.
358 citations
TL;DR: A theoretical model of the family as producer of health- and social capital finds that social capital is positively related to the level of health capital, which supports the theoretical model.
228 citations
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TL;DR: In this paper, the authors re-examine whether education has a causal impact on health and find evidence of a causal effect from education to health and suggest that the income returns to education substantially underestimate the overall return to education.
Abstract: Prior research has uncovered a large and positive correlation between educa- tion and health, but there are difficulties in determining whether this relation- ship is causal. In this paper I reexamine whether education has a causal impact on health. I follow synthetic cohorts using successive U.S. censuses to estimate the impact of educational attainment on mortality rates. I then use compulsory education laws from 1915 to 1939 as instruments to obtain a consistent causal estimate of this effect. While least squares estimates suggest that an additional year of education lowers the probability of dying in the next 10 years by ap- proximately 1.3 percentage points, results from the IV estimation show that the effect is in fact much larger, at least 3.6 percentage points. Overall, one more year of education increases life expectancy at age 35 by 1.2 years. These results provide evidence of a causal effect from education to health and suggest that the income returns to education substantially underestimate the overall returns to education.
189 citations