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I’ve suggested to folks that perhaps the best way to improve health outcomes in America is to improve American education. Empirically we know that better educated people have better health outcomes and it is not hard to imagine why. That sounds all well and good.

However, today we learn the process works the other way ’round too: that if people do not expect future health outcomes to be good, then perhaps they will underinvest in their skills while young. Again that’s not surprising.

What’s an enlightened reformer to do? The abstract to the paper I refer to is below:

Limited Life Expectancy, Human Capital and Health Investments:
Evidence from Huntington Disease
by Emily Oster, Ira Shoulson, E. Ray Dorsey  –  #17931 (AG LS)


One of the most basic predictions of human capital theory is that
life expectancy should impact human capital investment.  Limited
exogenous variation in life expectancy makes this difficult to test,
especially in the contexts most relevant to the macroeconomic
applications.  We estimate the relationship between life expectancy
and human capital investments using genetic variation in life
expectancy driven by Huntington disease (HD), an inherited
degenerative neurological disorder with large impacts on mortality.
We compare investment levels for individuals who have ex ante
identical risks of HD but learn (through early symptom development or
genetic testing) that they do or do not carry the genetic mutation
which causes the disease.  We find strong qualitative support:
individuals with more limited life expectancy complete less education
and less job training.  We estimate the elasticity of demand for
college completion with respect to years of life expectancy of 0.40.
This figure implies that differences in life expectancy explain about
10% of cross-country  differences in college enrollment.  Finally, we
use smoking and cancer screening data to test the corollary that
health capital is responsive to life expectancy.

One Response to “Endogeniety, Big Time”

  1. chuck martel says:

    Evel Knievel never went to college.

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