Abstract
This paper has two purposes. The first is to obtain structural health parameters in wage and labor supply function based on a completely specified model of the determination of these two variables. The second is to examine how the estimated effects of health on labor market behavior are altered when health is made an endogenous variable. We hypothesize that an increase in health should raise market productivity, measured by the wage rate, and should also increase the amount of time available for work in the market. Health, itself should respond in a positive fashion to increases in variables associated with efficiency of production within the household, such as schooling, and to increases in utilization of market goods which enter into the production of good health. We examine three variables related to the level of medical utilization: physicians per capita in the county of residence; health insurance coverage; and utilization of preventive medical services.
Research for this paper was supported by P.H.S. Grant No. 5 P01 HS00451 and by P.H.S. Grant No. HS00080 from the National Center for Health Services Research and Development. We should like to thank Ronald Andersen for generously making the data available for this study; Y oram Ben-Porath, Barry Chiswick, Linda Nasif Edwards, Lee Lillard and Jacob Mincer for helpful comments and suggestions; and Phyllis Goldberg, Harold Pashner and Janice Platt for diligent research assistance. This paper is not an official National Bureau of Economic Research publication, since the findings reported have not yet undergone the full critical review accorded the National Bureau’s studies, including approval of the Board of Directors.
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© 1974 The International Economic Association
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Grossman, M., Benham, L. (1974). Health, Hours and Wages. In: Perlman, M. (eds) The Economics of Health and Medical Care. International Economic Association Series. Palgrave Macmillan, London. https://doi.org/10.1007/978-1-349-63660-0_12
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DOI: https://doi.org/10.1007/978-1-349-63660-0_12
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