Template-Type: ReDIF-Paper 1.0
Series: Tinbergen Institute Discussion Papers
Creation-Date: 2014-01-09
Number: 15-004/V
Author-Name: Govert Bijwaard
Author-Workplace-Name: University of Groningen, the Netherlands
Author-Name: Hans van Kippersluis
Author-Workplace-Name: Erasmus University Rotterdam, the Netherlands
Title: Efficiency of Health Investment: Education or Intelligence?
Abstract: In this paper we hypothesize that education is associated with a higher efficiency of health investment, yet that this efficiency advantage is solely driven by intelligence. We operationalize efficiency of health investment as the probability of dying conditional on a certain hospital diagnosis, and estimate a multistate structural equation model with three states: (i) healthy, (ii) ill (in hospital), and (iii) death. We use data from a Dutch cohort born around 1940 that links intelligence tests at age 12 to later-life hospitalization and mortality records. The results suggest that higher Intelligence induces the higher educated to be more efficient users of health investment - intelligent individuals have a clear survival advantage for most hospital diagnoses - yet for unanticipated health shocks and diseases that require complex treatments such as COPD, education still plays a role.
Classification-JEL: C41, I14, I24
Keywords: Education, Intelligence, Health, Multistate duration model
File-Url: https://papers.tinbergen.nl/15004.pdf
File-Format: application/pdf
File-Size: 475652 bytes
Handle: RePEc:tin:wpaper:20150004