Empirical Study On The Health Benefits Of Education In China

Health itself is not only just a very important wealth, but also a key factor to the social development, economic growth and also the personal benefits. By the development of the human capital theory, health has been an important issue which attracts a mass of economists. Grossman built up a human capital model of the health demand, which gives us a theory to investigate the consumers' investment in his/her health capital. The Grossman health demand theory believes that health is demanded by consumers for two reasons. As a consumption commodity, it directly enters their preference functions, or, put differently, sick days are a source of disutility. As an investment commodity, it determines the total amount of time available for market and nonmarket activities. In other words, an increase in the stock of health reduces the amount of time lost from these activities, and the monetary value of this reduction is an index of the return to an investment in health. The health investment proceeds as a household production. Consumers as investors in their human capital produce these investments with inputs of their own time and market products such as medical services, food. The health production function is affected by some environmental variables such as the gender and career. Grossman believes that years of formal schooling completed plays a large role in this context, which determines the efficiency or productivity of health production.Education and health are the two most important composing of human capital. They interact in their levels and in the ways they affect the cost and usefulness of the other. There have already been proved that there are many monetary and nonmonetary benefits of education, health demand theory believes that education has a positive influence on the health production, so there exists health benefits of education. This thesis comes from the observed positive correlations between each other. But this positive correlation may be explained in one of three ways. The first argues that there is a causal relationship that runs from increases in schooling to increases in health. The second holds that the direction of causality runs from better health to more schooling. The third argues that no causal relationship is implied by the correlation; instead, differences in one or more "third variables" such as physical and mental ability and parental characteristics, affect both health and schooling in the same direction.Among these opinions, the first one and the last one are totally different from a public policy perspective. There are many difficulties if we want to distinguish each other in our empirical study. If we can prove that there are actually the health benefits of education, it will mean a lot to the medical reform and the improvement of the people' health status. If the increment of education exactly causes better health, then we can provide extra investment in education area to realize our goals of medical reform, which aims to improve the people' health status. But if there is no such a causallity relationship between them, increase the investment in educational will not be helpful to achieve our goals.The task of this dissertation is to prove whether or not there are health benefits of education in China and to ensure the role of education in the health production. The following questions will be answered in this dissertation:(1) What are the major factors which affect health demand of the people, and does education really take a very important role in the health production? We will obtain quantitative estimates of their relative magnitudes. (2) If we can prove there actually is a positive correlation between education and health, then what dose this positive correlation means? There are three ways to explain this positive correlation. (3) If we can prove education does has the positive influence on the health, then there will be two more questions, how can we quantify this effect and what is the shape of the education-health relationship. (4) If there are profitable health benefits, so what influence will the education gives to our health system performance? (5) What are the implications of these conclusions to public policy analysis? Should the public resources be reallocated so as to improve the health status of the people and eliminate health disparities?The thought and structure of this dissertation is following that:Firstly, we elaborate the questions we want to investigate, the background of this study and the meaning of this paper. In chapter 2 we review the related literatures. We introduce the human capital theory because the health demand model draws heavily on it, and we offer a detailed outline of the Grossman health demand model. At the same time, we discuss the returns of education and review the empirical literatures related the health benefits of education. We valuate and described the present health situation of the Chinese residents in chapter 3 qualitatively and quantitatively. In chapter 4, we investigate the health benefits of education empirically. We want to attest to the causality between health and education which means better education cause better health. First, we estimate the Grossman model of demand for health based on China Health and Nutrition Survey micro data taking no account of endogeneity which arose by the unobservable factors, so as to obtain quantitative estimates of marginal effects of education and other variables on the health demand. Secondly, using the lagged variable of self-reported health as the proxy variable, we resolve the endogenous problem roughly. Lastly, we examine reasons for the observed education-health correlation using self-selection model, which treats education as an endogenous variable. Based on the conclusions we acquired in chapter 4, we investigate the influence of education on the health system performance treating health as the output using the provincial panel data. At the same time, we investigate the efficiency of health production and calculate the efficiency index of health system of each province in China based on the stochastic frontier model. In chapter 6, we apply the relationship between health and education to the analysis of public policy. Lastly, chapter 7 summarizes and concludes.The main viewpoints of the dissertation are as follows. Using the self-reported health status data from China Health and Nutrition Survey, we find that the level of Chinese people'health decreased during from 2000 to 2006, and the health distribution became more unequal. We compare the statistical distribution of self-reported health status in 2000 and 2006, find that the health level of residents in 2006 decreased compared with 2000. We also find that health distribution became more unequal if we adopt the median as our standard for evaluating inequality. Based on the same data, we calculat the health concentration index, analyze the income-related health inequality and education-related health in equality in China. The study finds that the inequality degree in China is much higher compared to other countries, and differentiates among areas with different economic development level and education groups.We estimate the health demand equation of Chinese people based on China Health and Nutrition Survey micro data. The results show that the impact of education on health is positive even when we control for other inputs in the health production such as household income and personal income, medical service and other personal characteristics. After taking unobserved heterogeneity into account, it remains positive. So, we validate the health benefits of education in China. The parameter estimation value of education is larger than the parameter estimation values of medical service and medical insurance, just smaller than the age's. This means education take a more important role in health production than medical service. But the shape of the education-health relationship is nonlinear, which means the marginal effect on health of an additional year of schooling is not similar across all levels of education.The relationship of mortality of Chinese people to both education and other environmental variable is examined in a regression analysis across provinces. Health is measured by mortality and education is measured by the average level of education. The results show that education is negatively correlated with mortality; its affection is the largest among the input factors such as income and physicians. The elasticity of mortality with respect to education is-3%, means a one percent increase in the average level of education reduces mortality by three percent. After acquired these conclusions, we believe that education can take a more important place in our medical reform and health promotion. In order to improve the Chinese people' health and eliminate the health disparities, we should realize the optimization of resource distribution both within medical sector and among sectors suchs as medical sector and education sector.