The second article under consideration is discussing the correlation reflects causality from more schooling to better health. For example, past studies suggest that years of formal schooling completed is the most important correlate of good health; however, the relationship may be traced in part to reverse causality since a longer life expectancy increases the payoffs to investments in schooling and since healthier students may attend school for longer periods of time (Grossman, 2008). In this study, the author’s strategy is to select several older papers that point to or question causal effects. The author deals with the empirical literature on the relationship between an individual’s own health and own schooling or between child health and parents’ schooling (Grossman, 2008).
Researcher examines time-series data on completed schooling, infant mortality, and age-adjusted mortality in the United States population between 1910 and 2000 (Grossman, 2008) in order to show the trends in the health and educational attainment. The author includes sample size of 50 observations in the infant mortality equation (first regression) and 49 observations in the age-adjusted mortality equation (second regression) and each of the regressions contain an intercept and a cubic time trend (Grossman, 2008). The author also uses his older study which includes data deal with illness an injury and on restricted activity days in a nationally representative 1963 United States survey conducted by the Center for Health Administration Studies and the National Opinion Research Center of the University of Chicago (Grossman, 1972b).
The author develops a model in which schooling causes health, which looks at two approaches. The first one is Productive efficiency—effects in the context of a model of the production of health and the demand for health. In this model, it contains both investment and consumption motives for demanding health. It is because as a consumption commodity, health is a direct source of utility; as an investment commodity, it determines the total amount of time in a period that can be allocated to work in the market and to the production of commodities in the non-market sector (Grossman, 2008). The model is displayed below:
where H is a positive function of health because increases in health lower the time lost from these activities due to illness and injury (∂h/∂H≡G>0), M is the inputs of medical care, T is the own time of the consumer, S is the years of formal schooling completed, ρ is the positive parameter, and F is the linear homogeneous in M and T. Schooling has a productive efficiency effect in the sense that an increase in S raises the amount of health obtained from given amounts of M and T. Since H is homogeneous of degree one in these two input, an increase in schooling raises their marginal products on average. The specification in equation (1) assumes that a one-unit increase in S raises each marginal product by the same...