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The return to education in terms of wealth and health

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  • Strulik, Holger

Abstract

This study presents a new view on the association between education and longevity. In contrast to the earlier literature, which focused on inefficient health behavior of the less educated, we investigate the extent to which the education gradient can be explained by fully rational and efficient behavior of all social strata. Specifically, we consider a life-cycle model in which the loss of body functionality, which eventually leads to death, can be accelerated by unhealthy behavior and delayed through health expenditure. Individuals are heterogeneous with respect to their return to education. The proposed theory rationalizes why individuals equipped with a higher return to education chose more education as well as a healthier lifestyle. When calibrated for the average male US citizen, the model motivates about 50% percent of the observable education gradient by idiosyncratic returns to education, with causality running from education to longevity. The theory also explains why compulsory schooling has comparatively small effects on longevity and why the gradient gets larger over time through improvements in medical technology.

Suggested Citation

  • Strulik, Holger, 2018. "The return to education in terms of wealth and health," The Journal of the Economics of Ageing, Elsevier, vol. 12(C), pages 1-14.
    • Handle: RePEc:eee:joecag:v:12:y:2018:i:c:p:1-14
    DOI: 10.1016/j.jeoa.2017.11.001
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    Cited by:

    1. Leonid V Azarnert, 2020. "Health capital provision and human capital accumulation," Oxford Economic Papers, Oxford University Press, vol. 72(3), pages 633-650.
    2. Carl‐Johan Dalgaard & Casper Worm Hansen & Holger Strulik, 2021. "Fetal origins—A life cycle model of health and aging from conception to death," Health Economics, John Wiley & Sons, Ltd., vol. 30(6), pages 1276-1290, June.
    3. Strulik, Holger & Trimborn, Timo, 2018. "Hyperbolic discounting can be good for your health," Journal of Economic Psychology, Elsevier, vol. 69(C), pages 44-57.
    4. Schünemann, Johannes & Strulik, Holger & Trimborn, Timo, 2023. "Anticipation of deteriorating health and information avoidance," Journal of Health Economics, Elsevier, vol. 89(C).
    5. Titus J Galama & Hans van Kippersluis, 2019. "A Theory of Socio-economic Disparities in Health over the Life Cycle," The Economic Journal, Royal Economic Society, vol. 129(617), pages 338-374.
    6. Strulik, Holger, 2019. "An economic theory of depression and its impact on health behavior and longevity," Journal of Economic Behavior & Organization, Elsevier, vol. 158(C), pages 269-287.
    7. Böhm, Sebastian & Grossmann, Volker & Strulik, Holger, 2021. "R&D-driven medical progress, health care costs, and the future of human longevity," The Journal of the Economics of Ageing, Elsevier, vol. 18(C).
    8. Böhm, Sebastian & Grossmann, Volker & Strulik, Holger, 2017. "The Future of Human Health, Longevity, and Health Costs," VfS Annual Conference 2017 (Vienna): Alternative Structures for Money and Banking 168288, Verein für Socialpolitik / German Economic Association.
    9. Strulik, Holger, 2018. "Smoking kills: An economic theory of addiction, health deficit accumulation, and longevity," Journal of Health Economics, Elsevier, vol. 62(C), pages 1-12.
    10. Ana Lucia Abeliansky & Holger Strulik, 2023. "Health and aging before and after retirement," Journal of Population Economics, Springer;European Society for Population Economics, vol. 36(4), pages 2825-2855, October.
    11. Danny Wende & Alexander Karmann & Ines Weinhold, 2024. "Deprivation as a fundamental cause of morbidity and reduced life expectancy: an observational study using German statutory health insurance data," International Journal of Health Economics and Management, Springer, vol. 24(2), pages 257-277, June.
    12. Johannes Schuenemann & Holger Strulik & Timo Trimborn, 2020. "The Marriage Gap: Optimal Aging and Death in Partnerships," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 36, pages 158-176, April.
    13. Dalgaard, Carl-Johan & Hansen, Casper Worm & Strulik, Holger, 2018. "Physiological Aging around the World and Economic Growth," CAGE Online Working Paper Series 375, Competitive Advantage in the Global Economy (CAGE).
    14. Mirela Cristea & Graţiela Georgiana Noja & Cecilia-Nicoleta Jurcuţ & Constantin Ştefan Ponea & Elena Sorina Caragiani & Alin Viorel Istodor, 2021. "The Interplay between Public Health, Well-Being and Population Aging in Europe: An Advanced Structural Equation Modelling and Gaussian Network Approach," IJERPH, MDPI, vol. 18(4), pages 1-20, February.
    15. Titus J. Galama & Adriana Lleras-Muney & Hans van Kippersluis, 2018. "The Effect of Education on Health and Mortality: A Review of Experimental and Quasi-Experimental Evidence," NBER Working Papers 24225, National Bureau of Economic Research, Inc.
    16. Casper Worm Hansen & Holger Strulik, 2017. "Life expectancy and education: evidence from the cardiovascular revolution," Journal of Economic Growth, Springer, vol. 22(4), pages 421-450, December.
    17. Strulik, Holger, 2022. "A health economic theory of occupational choice, aging, and longevity," Journal of Health Economics, Elsevier, vol. 82(C).
    18. Schünemann, Johannes & Strulik, Holger & Trimborn, Timo, 2017. "The gender gap in mortality: How much is explained by behavior?," Journal of Health Economics, Elsevier, vol. 54(C), pages 79-90.
    19. Miguel Sánchez-Romero & Alexia Prskawetz, 2020. "Optimal time allocation in active retirement," Central European Journal of Operations Research, Springer;Slovak Society for Operations Research;Hungarian Operational Research Society;Czech Society for Operations Research;Österr. Gesellschaft für Operations Research (ÖGOR);Slovenian Society Informatika - Section for Operational Research;Croatian Operational Research Society, vol. 28(2), pages 401-424, June.
    20. Carl-Johan Dalgaard & Casper Worm Hansen & Holger Strulik, 2017. "Accounting for Fetal Origins: Health Capital vs. Health Deficits," Discussion Papers 17-11, University of Copenhagen. Department of Economics.
    21. Strulik, Holger, 2019. "I shouldn’t eat this donut: Self-control, body weight, and health in a life cycle model," The Journal of the Economics of Ageing, Elsevier, vol. 14(C).

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    More about this item

    Keywords

    Health inequality; Schooling; Aging; Longevity; Health expenditure; Unhealthy behavior; Smoking; Value of life;
    All these keywords.

    JEL classification:

    • D91 - Microeconomics - - Micro-Based Behavioral Economics - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making
    • I10 - Health, Education, and Welfare - - Health - - - General
    • I20 - Health, Education, and Welfare - - Education - - - General
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity

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