Health Investment over the Life-Cycle

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

No 200910, Working Papers from University of Hawaii at Manoa, Department of Economics

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: Health Investment; Consumption motive; investment motive; life-cycle (search for similar items in EconPapers)
JEL-codes: E21 I12 (search for similar items in EconPapers)
Pages: 50 pages
Date: 2009-10-07
New Economics Papers: this item is included in nep-dge, nep-hea and nep-mac
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (19)

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http://www.economics.hawaii.edu/research/workingpapers/WP_09-10.pdf First version, 2009 (application/pdf)

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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