What is it about?
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) hospitalized, and (iii) death. We use data from a Dutch cohort born around 1940 that links intelligence tests at age 12 years to later-life hospitalization and mortality records. The results indicate that intelligent individuals have a clear survival advantage for most hospital diagnoses, while the remaining disparities across education groups are small and not statistically significant
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Why is it important?
Health disparities across educational groups are widespread, and – strikingly – growing over time. In this paper, we formulate two testable hypotheses regarding the sources of these disparities: (i) education is associated with a higher efficiency of health investment, and (ii) conditional on intelligence, education does not improve the efficiency of health investment. We find evidence for an association between education and the efficiency of health investment: Higher educated individuals are less likely to die during middle-age after a hospitalization. These results hold even for a given health status and given a certain diagnosis. We challenge the interpretation that education itself drives the efficiency of health investment:When accounting for the role of intelligence using a structural equation model, the association between education and the efficiency of health investment disappears. This suggests that intelligence accounts for a substantial proportion of the survival advantage of higher educated individuals, consistent with evidence by Conti et al. (2010) and Bijwaard et al. (2015).
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This page is a summary of: Efficiency of Health Investment: Education or Intelligence?, Health Economics, May 2016, Wiley,
DOI: 10.1002/hec.3356.
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