Efficiency of Health Investment: Education or Intelligence?

G.E. Bijwaard, H. van Kippersluis

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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) ill (in hospital), and (iii) death. We use data from a Dutch cohort born around 1940 that links intelligence tests at age 12 to later-life hospitalization and mortality records. The results suggest that higher Intelligence induces the higher educated to be more efficient users of health investment - intelligent individuals have a clear survival advantage for most hospital diagnoses - yet for unanticipated health shocks and diseases that require complex treatments such as COPD, education still plays a role.
Originele taal-2Engels
StatusGepubliceerd - 2015

Publicatie series

NaamTinbergen Discussion paper
UitgeverijTinbergen Institute


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