The Labor Market Value of Health Improvements

Published in: Forum for Health Economics and Policy ; Biomedical Research and the Economy (Berkeley, CA: Berkeley Electronic Press, 2006), v. 9, issue 2, article 2, p. 1-22

Posted on RAND.org on December 31, 2005

by Jay Bhattacharya, Darius N. Lakdawalla

The authors analyze the value to the labor force of improvements in survival and health over the years 1970 to 1999. They find that survival gains and reductions in the number of work-days missed due to poor health have added about 8 percent to the remaining labor force value of black males, and about the same to the value of 60 year-old white males. This is almost as large an effect as a full year of schooling. Gains for younger white males appear to be approximately 5%, and gains for women are around 2%. Overall, health improvements have added $1.5 trillion to the value of labor market human capital over this period.

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