In this paper, we hypothesize that education is associated with a higher efficiency of health investment, yet that this efficiency advantage is solely driven by intelligence. We operationalize efficiency of health investment as the probability of dying conditional on a certain hospital diagnosis and estimate a multistate structural equation model with three states: (i) healthy, (ii) hospitalized, and (iii) death. We use data from a Dutch cohort born around 1940 that links intelligence tests at age 12 years to later-life hospitalization and mortality records. The results indicate that intelligent individuals have a clear survival advantage for most hospital diagnoses, while the remaining disparities across education groups are small and not statistically significant.

Education, Health, Intelligence, Multistate duration model,
Health Economics
Erasmus School of Economics

Bijwaard, G.E, & van Kippersluis, J.L.W. (2016). Efficiency of Health Investment: Education or Intelligence?. In Health Economics (Vol. 25, pp. 1056–1072). doi:10.1002/hec.3356