Free help with homework

Why join Brainly?

  • ask questions about your assignment
  • get answers with explanations
  • find similar questions


In Education and Health: Evaluating Theories and Evidence (NBER Working Paper No. 12352), authors David Cutler and Adriana Lleras-Muney review what we know about the relationship between education and health, in particular about the possible causal relationships between education and health and the mechanisms behind them. At the outset they note that this is a controversial topic, with previous studies offering contradictory conclusions.People value health highly. As a result, the health returns to education can outweigh even the financial returns. Many estimates suggest that a year of education raises earnings by about 10 percent, or perhaps $80,000 in present value over the course of a lifetime. Using data from the National Longitudinal Mortality Study (NLMS), the authors find that one more year of education increases life expectancy by 0.18 years, using a 3 percent discount rate, or by 0.6 years without any discounting. Assuming that a year of health is worth $75,000 - a relatively conservative value - this translates into about $13,500 to $44,000 in present value. These rough calculations suggest that the health returns to education increase the total returns to education by at least 15 percent, and perhaps by as much as 55 percent.The causal effects of education on health would call for education subsidies only to the extent that there is a market failure and that individuals are investing at sub-optimal levels; otherwise, individuals would be basing their education decisions on health benefits along with financial benefits. The possible rationales for education subsidies include the idea that individuals may be unaware of the health benefits of education when they make their education decisions, that they may be credit constrained, that some groups do not know about or are excluded from higher education, or that there are externalities to education and health beyond the individual affected.
0 0 0
The Brain
  • The Brain
  • Helper
Not sure about the answer?
Learn more with Brainly!
Having trouble with your homework?
Get free help!
  • 80% of questions are answered in under 10 minutes
  • Answers come with explanations, so that you can learn
  • Answer quality is ensured by our experts