David M.

Cutler Spring 2019

Lecture 4: Education and Health

Key points:
• The ‘gradient’ in health
• Education is causally related to health
• The reason why is unclear, though may have to do with cognitive processing

I. Introduction

Health has a very strong gradient in education. Mortality and quality of life are each
related to education. ‘Gradient’ is actually a technical term, invented by (Sir) Michael Marmot
in the UK.

Start off with basic facts. Most are by education, some are by income, but think of them
the same way. Education is better b/c it reflects permanent income. Show data for US, but this
is true for the UK and other developed countries as well.

Life Expectancy increases strongly with

income and education. Difference in life
expectancy between rich and poor at age 45 is
about 6 years for men, 3 years for women. Life
expectancy at age 25 is 8 years higher for college
grads than high school dropouts.

Infant Deaths / 1,000 by Mom's

Education
20

15 This is true at younger ages as well.

Infant mortality declines in mom’s education.
10 This is true for both whites and blacks. A
related (?) issue: infant mortality is much
5 higher for blacks than whites. White women
without a high school degree have lower infant
0
mortality than black women with a college
White Black
degree.
<12 years 12 years 13-15 years 16+ years

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 Quality of life is very
different by income. Low income
people have very rapidly declining
QOL compared to higher income
people.

Cutler and Lleras-Muney show

the gradient by exact years of
education. It’s clear that the gradient
is not just a result of basic education.

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II. Possible Theories

Broadly: o Education causes health

o Health causes education
o Some third factor causes both (discounting)

𝐻 = 𝛽0 + 𝛽1 𝐸 + 𝑋𝛽 + 𝜀;
𝐸 = 𝛼0 + 𝛼1 𝐻 + 𝑍𝛼 + 𝜇

1. Health causes education:

Case and Paxson look at this (we will return to this later).
There does seem to be some effect here.
But it’s clearly not all of it – witness pregnant women and babies

2. Education causes health:

Why might education affect health?
• Educated people can afford more health-producing stuff
• Specific things that you learn (cigarettes are bad for you)
• General knowledge
(All of these might be associated with productive and allocative efficiency)

3. Third factors:
Discount rates (Vic Fuchs)
Value of the future

Disentangling the relationships requires some plausible variation. Take a specific example: does
education lead middle aged people (45-64) to be in better health? One can easily gather data on
this, for example the Health and Retirement Study (people aged 51+, followed biennially from
1992 on). Education is well measured. Proxy for health with several variables:
- risk factors (obese, smoker)
- presence of disease (heart disease, cancer)
- functional limitations (difficulty walking, standing)
- death (conditional on being alive at the beginning of the survey)

What does one do?

1) Including enough controls in X and Z.

2) Use family fixed effects (often used for younger people).
3) Think about an instrument for education.

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III. Education and Health: Causal Determination

Some very good work has gone into the causality question. Two instruments in particular strike
me as very good.

Compulsory Education (Lleras-Muney, Restat, 2005)

Between 1915 and 1939, 30+ states changed compulsory school and child labor laws. Can learn
about the impact of education for the person at the margin of dropping out of school or not.

Look at people who were 14 between 1915 and 1939, matched to state of birth (ignores early life
mobility).

Data from 1960, 1970, and 1980 censuses. Calculate ten year death rates over the 1960s (1960-
70) and 1970s (1970-80) by birth year and state of birth.

Issues: In or out migration, but not likely to be related to schooling.

Results:

First stage: 1 year of compulsory education increases education by 0.05 years on

average.
Second stage: Each year of compulsory schooling lowers mortality by .002.

Wald estimate of impact of education on mortality

𝑑𝑀𝑅 𝑑𝑀𝑅/𝑑𝐶 −.002

= = = −.04.
𝑑𝐸 𝑑𝐸/𝑑𝐶 .05

This has been followed up by Oreopoulos (Canada and England and Wales, 2003), Arendt
(Denmark, 2005), and Spasojevic (Sweden, 2003).

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But not all studies find this. Clark and Royer examine the impact of major education changes in
the UK in 1947 (stay in school to 15) and 1972 (stay in school to 16). Neither of these changes
seemed to lower mortality rates.

Impact of 1972 change Impact of 1947 change

It is unclear why these should be so different

• Few versus many people treated?
• What education kept you out of (incarceration effect)?
• Return to education in that time period?

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College openings (Currie and Moretti, QJE, 2003)

Look at college openings between 1940 and 1966.

1940: 346 2-year colleges and 1301 4-year colleges
1966: 1436 2-year colleges and 1808 4-year colleges

Availability = # colleges when 17 / # 18-22 year-olds at the county level

o County only known at time of birth. Assume same as when 17
→ differential mobility by education is an issue

Sample: Data from Vital Statistics, 1970-99 – data is at the birth level
Women 24-45 (get when education completed)
First births (get rid of parity effects)

Regressions:

First stage: 𝐸𝑑𝑢𝑐 = 𝛽0 + 𝛽1 𝐼𝑉2 + 𝛽2 𝐼𝑉4 + 𝛽3 𝐴𝐺𝐸 + 𝛽4 𝐶𝑂𝐻𝑂𝑅𝑇 +

𝛽5 𝐶𝑜𝑢𝑛𝑡𝑦 ∗ 𝑌𝑒𝑎𝑟 + 𝛽6 𝑌17 + 𝛽7 𝑈𝑟𝑏𝑎𝑛17

̂ + 𝛼3 𝐴𝐺𝐸 + 𝛼4 𝐶𝑂𝐻𝑂𝑅𝑇 +
Second stage: 𝑂𝑢𝑡𝑐𝑜𝑚𝑒 = 𝛼0 + 𝛼1 𝐸𝑑𝑢𝑐
𝛼5 𝐶𝑜𝑢𝑛𝑡𝑦 ∗ 𝑌𝑒𝑎𝑟 + 𝛼6 𝑌17 + 𝛼7 𝑈𝑟𝑏𝑎𝑛17

Concerns: 1. Colleges open where education is increasing or expect to increase

2. Endogenous mobility

Impact on 1) No trend beforehand

education: 2) No impact of colleges opening after 25
3) 4 year college affects 4 year graduation, and 2 year colleges affect some
college attendance.
4) No effect of female→ coed conversion on education of women
5) Public colleges matter more than private colleges

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Results: 4 year college openings affect education Improved outcomes

Average
years of Pr[college
education education]

Pr[high school
Pr[community
only]
college]

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Results:

• A year of education
reduces the incidence of
low birth weight by
approximately 10 percent,
and reduces the incidence
of preterm birth by 6
percent, on average.
• Education reduces smoking
while pregnant
• Education reduces fertility,
esp. non-marital fertility

IV. Education and Behaviors

Why is education related to behaviors? (Cutler and Lleras-Muney, JHE, 2010)

Estimate two equations:

𝐻 = 𝛽0 + 𝛽1 𝐸 + 𝑑𝑒𝑚𝑜𝑔 + 𝜀;
𝐻 = 𝛼0 + 𝛼1 𝐸 + 𝑑𝑒𝑚𝑜𝑔 + 𝑋𝛼 + 𝜀;

The ratio 𝛼1 /𝛽1 shows the impact of characteristic X on the education-health relationship. Note:
This is not kosher econometrically if X is endogenous.

Data: A number of different data sets, best is NLSY.

(Lots of mediating factors)

Factors: Socioeconomic (income)

Cognitive ability – specific knowledge; general cognitive ability
Tastes – value of future, discounting
Personality (self-esteem, depression, self-control)
Social integration (contact with friends, family)

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Results: Controlling for ASVAB explains a part of the education-health gradient.

Controlling for life satisfaction, personality variables, and social integration doesn’t affect
education-health gradient. Discount rate controls also don’t matter.

Summary

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 One way to see the lack of importance of discount rates – behaviors are correlated with
education but not that correlated across individuals.

Interpretation
Depths of beliefs
Look at the Motor Vehicle Occupant Safety Survey (periodic from the US Department of
Transportation.

Want to have seatbelt on if in Seatbelts just as likely to harm as help

accident in an accident
Some Some
Agreement <HS HS College College + <HS HS College College +
Strongly Agree 83% 84% 88% 92% 35% 16% 10% 5%
Somewhat Agree 9% 8% 7% 5% 22% 25% 21% 15%
Somewhat Disagree 3% 3% 2% 1% 11% 21% 24% 23%
Strongly Disagree 3% 3% 1% 1% 26% 34% 43% 56%
Don't Know/Refused 3% 2% 1% 1% 7% 3% 3% 2%

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 Complexity
Lichtenberg and Lleras-
Muney show that more educated
people take newer drugs. The effect
isn’t huge – average drug is -0.1
years newer – but could indicate a
willingness or access to newer,
better therapy.

Goldman and Smith (PNAS,

2002) look at diabetes management.
People do better on intensive
treatment, esp. those with less
education.

For next time: Watch some TV!: https://www.youtube.com/watch?v=xq4pvR-HYWA

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