Health Investment over the Life-Cycle

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

No 1179, 2010 Meeting Papers from Society for Economic Dynamics

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.

Date: 2010
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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 (2009)
Working Paper: Health Investment over the Life-Cycle (2009)
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Persistent link: https://EconPapers.repec.org/RePEc:red:sed010:1179

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