A Dynamic Model of Health, Education, and Wealth with Credit Constraints and Rational Addiction

Hai, Rong; Heckman, James J.

doi:10.2139/ssrn.2688384

Cited by 19 publications

(17 citation statements)

References 50 publications

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“… Recent work by Navarro () and Hai and Heckman () is consistent with this interpretation of the evidence. …”

supporting

confidence: 73%

“…Fourth, targeted conditional transfers (targeted on a child's ability improvements) 23 See the discussion in Heckman and Mosso (2014) who extensively review the structural literature. 24 Recent work by Navarro (2011) and Hai and Heckman (2015) is consistent with this interpretation of the evidence. 25 Carneiro and Ginja report similar findings.…”

Section: Structural Estimates Of Behavioural Responses To Public Polisupporting

confidence: 53%

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Child Development and Parental Investment: Introduction

Francesconi

Heckman

2016

Econ J

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138

102

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“… Recent work by Navarro () and Hai and Heckman () is consistent with this interpretation of the evidence. …”

supporting

confidence: 73%

Section: Structural Estimates Of Behavioural Responses To Public Polisupporting

confidence: 53%

Child Development and Parental Investment: Introduction

Francesconi

Heckman

2016

Econ J

Self Cite

138

102

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“…2 These two features have not been brought together in a combined life-cycle framework, with the notable exceptions of Hokayem and Ziliak (2014) and Hai and Heckman (2015). must be borne by the agent.…”

Section: Introductionmentioning

confidence: 99%

Health Shocks and the Evolution of Consumption and Income over the Life-Cycle

Capatina¹,

Keane

Maruyama³

2018

SSRN Journal

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This paper studies the effects of health on earnings dynamics and on consumption inequality over the life-cycle. We build and calibrate a life-cycle model with idiosyncratic health, earnings and survival risk where individuals make labor supply and asset accumulation decisions, adding two novel features. First, we model health as a complex multi-dimensional concept. We differentiate between functional health and underlying health risk, temporary vs. persistent health shocks, and predictable vs. unpredictable shocks. Second, we study the interactions between health and human capital accumulation (learning-by-doing). These features are important in allowing the model to capture the degree to which, and the pathways through which, health impacts earnings and consumption patterns. They are also very important in estimating the value of health insurance and social insurance. A key finding is that health shocks account for roughly half of the growth in offer wage inequality over the life cycle. Eliminating health shocks leads to a 5.5% decline in the variance of the present value of earnings across all individuals. We thank Dr Philip Haywood for excellent assistance in classifying health shocks based on the International Classification of Diseases (ICD) codes.

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“…Their aim is to simulate the implications of various policies on the association between years of schooling and health and to explain historical patterns. Hai and Heckman (2014) develop and structurally estimate a dynamic lifecycle model of health, skill and wealth that allows for credit constraints and rational addictive unhealthy behavior. Their aim is to quantify causal effects of education and wealth on health and unhealthy behavior and to quantify reverse causality and selection.…”

Section: Introductionmentioning

confidence: 99%