Economic Status and Health in Childhood: The Origins of the Gradient

We show that the well-known positive association between health and income in adulthood has antecedents in childhood. Using the National Health Interview Surveys, the Panel Study of Income Dynamics, and the National Health and Nutrition Examination Survey, we find that children's health is positively related to household income. The relationship between household income and children's health status becomes more pronounced as children grow older. A large component of the relationship between income and children's health can be explained by the arrival and impact of chronic health conditions in childhood. Children from lower-income households with chronic health conditions have worse health than do children from higher-income households. Further, we find that children's health is closely associated with long-run average household income, and that the adverse health effects of lower permanent income accumulate over children's lives. Part of the intergenerational transmission of socioeconomic status may work through the impact of parents' long run average income on children's health.

Different Contexts, Different Risk Preferences?

We examine the stability of risk preferences across contexts involving different stakes. Using data on households\u27 deductible choices in three property insurance coverages and their limit choices in two liability insurance coverages, we assess the stability across the five contexts in the ordinal ranking of the households\u27 willingness to bear risk. We find evidence of stability across contexts involving stakes of the same magnitude, but not across contexts involving stakes of very different magnitudes. Our results appear to be robust to heterogeneity in wealth and access to credit, complicating seemingly ready explanations

The Changing Distribution of Job Satisfaction

The distribution of job satisfaction widened across cohorts of young men in the United States between 1978 and 1988, and between 1978 and 1996, in ways correlated with changing wage inequality. Satisfaction among workers in upper earnings quantiles rose relative to that of workers in lower quantiles. An identical phenomenon is observed among men in West Germany in response to a sharp increase in the relative earnings of high-wage men in the mid-1990s. Several hypotheses about the determinants of satisfaction are presented and examined using both cross-section data on these cohorts and panel data from the NLSY and the German SOEP. The evidence is most consistent with workers regret about the returns to their investment in skills affecting their satisfaction. Job satisfaction is especially responsive to surprises in the returns to observable skills, less so to surprises in the returns to unobservables; and the effects of earnings shocks on job satisfaction dissipate over time.

Broken Down by Work and Sex: How Our Health Declines

Self-reported health status (SRHS) is an imperfect measure of non-fatal health, but allows examination of how health status varies over the life course. Although women have lower mortality than men, they report worse health status up to age 65. The SRHS of both men and women deteriorates with age. There are strong gradients, so that at age 20, men in the bottom quartile already report worse health than do men in the top quartile at age 50. In the bottom quartile of income, SRHS declines more rapidly with age, but only until retirement age. These facts motivate a study of the role of work, particularly manual work, in health decline with age. The Grossman capital-stock model of health assumes a technology in which money and time can effect complete health repair. As a result, declines in health status are driven, not by the rate of deterioration of the health stock, but by the rate of increase of the rate of deterioration. We argue that such a technology is implausible, and we show that people in manual occupations have worse SRHS and more rapidly declining SRHS, even with a comprehensive set of controls for income and education. We also find that much of the differences in SRHS across the income distribution is driven by health-related absence from the labor-force, which is a mechanism running from health to income, not the reverse.

Ill-health and retirement in Britain: a panel data-based analysis

We examine the role of ill-health in retirement decisions in Britain, using the first eight waves of the British Household Panel Survey (1991-98). As self-reported health status is likely to be endogenous to the retirement decision, we instrument self-reported health by a constructed ‘health stock’ measure using a set of health indicator variables and personal characteristics, as suggested by Bound et al (1999). Using both linear and non-linear fixed effects estimators, we show that adverse individual health shocks are an important predictor of individual retirement behaviour. We compare the impact of our constructed health measure on economic activity with that arising from the use of other health variables in the data set. We also examine the impact of the 1995 reform of disability benefits on the retirement decision

A comparison of direct and indirect methods for the estimation of health utilities from clinical outcomes

Background: Analysts often need to estimate health state utility values as a function of other outcome measures. Utility values like EQ-5D have several unusual characteristics that make standard statistical methods inappropriate. We have developed a bespoke approach based on mixture models to directly estimate EQ-5D. An indirect method, “response mapping”, first estimates the level on each of the five dimensions of the EQ-5D descriptive system and then calculates the expected tariff score. These methods have never previously been compared. Methods: We use a large observational database of patients diagnosed with Rheumatoid Arthritis (n=100,398 observations). Direct estimation of UK EQ-5D scores as a function of Health Assessment Questionnaire (HAQ), pain and age was performed using a limited dependent variable mixture model. Indirect modelling was undertaken using a set of generalized ordered probit models with expected tariff scores calculated mathematically. Linear regression was reported for comparison purposes. Results: The linear model fits poorly, particularly at the extremes of the distribution. Both the bespoke mixture model and the generalized ordered probit approach offer improvements in fit over the entire range of EQ-5D. Mean average error is 10% and 5% lower compared to the linear model respectively. Root mean squared error is 3% and 2% lower. The mixture model demonstrates superior performance to the indirect method across almost the entire range of pain and HAQ. Limitations: There is limited data from patients in the most extreme HAQ health states. Conclusions: Modelling of EQ-5D from clinical measures is best performed directly using the bespoke mixture model. This substantially outperforms the indirect method in this example. Linear models are inappropriate, suffer from systematic bias and generate values outside the feasible range

Ill health and retirement in Britain: a panel data based analysis

We examine the role of ill-health in retirement decisions in Britain, using the first eight waves of the British Household Panel Survey (1991-98). As self-reported health status is likely to be endogenous to the retirement decision, we instrument self-reported health by a constructed Ѩealth stock' measure using a set of health indicator variables and personal characteristics, as suggested by Bound et al (1999). Using both linear and non-linear fixed effects estimators, we show that adverse individual health shocks are an important predictor of individual retirement behaviour. We compare the impact of our constructed health measure on economic activity with that arising from the use of other health variables in the data set. We also examine the impact of the 1995 reform of disability benefits on the retirement decision.