Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/20578 
Year of Publication: 
2004
Series/Report no.: 
IZA Discussion Papers No. 1312
Publisher: 
Institute for the Study of Labor (IZA), Bonn
Abstract: 
A positive relationship between socio-economic status (SES) and health, the so-called "health-wealth gradient", is repeatedly found in most industrialized countries with similar levels of health care technology and economic welfare. This study analyzes causality from health to wealth (health causation) and from wealth to health (wealth or social causation) for elderly couples in the US. Using six biennial waves of couples aged 51-61 in 1992 from the Health and Retirement Study, we compare the recently developed strategy using Granger causality tests of Adams et al. (2003, Journal of Econometrics) with tests for causality in dynamic panel data models incorporating unobserved heterogeneity. While Adams et al. tests reject the hypothesis of no causality from wealth to husband's or wife's health, the tests in the dynamic panel data model do not provide evidence of wealth-health causality. On the other hand, both methodologies lead to strong evidence of causal effects from both spouses' health on household wealth.
Subjects: 
health
inequality
aging
dynamic panel data models
causality
JEL: 
D31
J14
I12
C33
Document Type: 
Working Paper

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