Health Status Over the Life Cycle

We construct a health measurement model which combines panel data on self-reported health with a rich set of health measures from administrative medical records. Our estimated health model allows us to predict healthstatus for the population at large. We account both for unobserved heterogeneity and for the persistence in unobserved health shocks. To account for inconsistent reporting in self-reported health we propose a `corrected' health measure. We show that this `corrected' measure substantially increases the estimated persistence in health status. We use predicted health status to study the evolution of health as individuals age. Moreover, we analyzehow health interacts with economic variables and education. We find a strong gradient in education; the age at which health starts to decline at a greater rate differs by education and gender.