Health Investment over the Life-Cycle

Timothy Halliday, Hui He () and Hao Zhang ()
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Hao Zhang: University of Hawaii at Manoa

No 4482, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: We study the evolution of health investment over the life-cycle by calibrating a model of endogenous health accumulation. The model is able to produce the decline in labor supply with age as well as the hump-shaped consumption profile. In both cases, health and health investment play a crucial role as the former encroaches upon healthy time and the latter crowds out non-medical expenditures as people age. Finally, we quantify the value of health as both an investment and a consumption good. We show that the investment motive is about three times higher than the consumption motive during the early 20s, but decreases over the life-cycle until it disappears at retirement. In contrast, the consumption motive increases with age and surpasses the investment motive during the mid 40s.

Keywords: medical expenditures; structural model; health investment (search for similar items in EconPapers)
JEL-codes: I12 (search for similar items in EconPapers)
Pages: 51 pages
Date: 2009-10
New Economics Papers: this item is included in nep-dge, nep-hea and nep-mic
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (26)

Published - published in: Macroeconomic Dynamics, 2019, 23 (1), 178-215.

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Related works:
Journal Article: HEALTH INVESTMENT OVER THE LIFE-CYCLE (2019)
Working Paper: Health Investment over the Life-Cycle (2012)
Working Paper: Health Investment over the Life-Cycle (2010)
Working Paper: Health Investment over the Life-Cycle (2009)
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