Education, health and time preference
Education has been shown to be the most important correlate of health. However, the mechanism through which education influences health has been largely unexplained. Grossman argued that education improves health production efficiency. In contrast, Fuchs argued that the association between health and education is not primarily causal but reflects unobserved causes of both outcomes. Instead of education causing better health, some ‘third’ variables may be related to both education and health. The ‘third’ variable most frequently mentioned is time preference. The aim of this project was to investigate the role of time preference in the relationship between education and health. It exploited a unique dataset of households which incorporated stated preference questions eliciting individuals’ time preferences. Empirical models which treat education as exogenous as well as empirical models with endogenous education were explored. The results provided some support for the third variable hypothesis. The effect of education reduces but does not disappear when controlling for individuals’ time preferences.
Outcome and Translation
It has been argued that population health can be improved by increasing education levels. This study tested the robustness of one part of the evidence that this policy recommendation is based on. It provided support for policies that aim to improve population health through education.
HERU researchers involved in this research project: Marjon van der Pol
Pol, M. van der. (2011) 'Health, education and time preference', Health Economics, 20(8), 917-929.
Pol, M. van der. (2007) ‘Education, health and time preference’, Nordic HESG, Tartu, Estonia, August 2007.
Pol, M. van der. (2008) ‘Education, health and time preference’, Health Economics Group, University of Calgary, Canada, March 2008.
Pol, M. van der (2011) 'The role of time and risk preferences and cognitive ability in the education-health relationship', University of Newcastle, Newcastle, November 2011.
Pol, M. van der. (2012) 'The role of time preferences in the education health relationship', European Conference on Health Economics (ECHE), Zurich, July 2012.