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Health Inequality Over The Life-cycle

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Executive Summary

The authors investigate the evolution of health inequality over the life-course. Health is modeled as a latent variable that is determined by three factors: endowments, and permanent and transitory shocks. They employ Simulated Minimum Distance and the Panel Study of Income Dynamics to estimate the model. They estimate that permanent shocks account for under 10% of the total variation in health for the college educated, but between 35% and 70% of total health variability for people without college degrees. Consistent with this, they find that health inequality moves substantially more slowly over the life-course for the college educated.

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