Three Essays on Health and Aging

This dissertation consists of three essays exploring the interface between health, aging, and economic behavior. The first essay explores the influence of declining health on consumption behavior with age. I solve a life-cycle model treating health as a form of human capital, and predict substantial decreases in consumption after age 50 consistent with observed declines for individuals in the Health and Retirement Study, 1992-2002. When health and consumption are complements, decreasing health capital results in falling marginal utility of consumption with age. Thus rational agents will consume at higher levels when they are younger and healthier. Since lower wealth groups generally experience more rapid health deterioration, this model largely accounts for the divergence in life-cycle consumption patterns across asset quartiles in the United States. The second essay investigates the contribution of population aging to trends in chronic conditions in the United States in the past decade and a half. I apply direct standardization to data on high cholesterol, hypertension, and obesity from the National Health and Nutrition Examination Surveys to adjust for changes in the population distribution of age, sex, race/ethnicity, poverty-income ratio, and educational status. I find that the influence of population aging, while important, is often smaller in magnitude than the effects of population shifts in other sociodemographic variables. The third essay considers the impact of a training program for health care workers in the assisted-living industry. Using repeated cross-section data on direct care workers in Wisconsin assisted-living facilities collected prior to and following the advent of the Worker Education Training and Assistance Program, and licensing data obtained from the Wisconsin Department of Health and Human Services, I investigate the effects of training on the wages of program participants and on quality of care in participating facilities, using a difference-in-differences framework with propensity scoring to control for the fact that the decision to participate in the WETA program was non-random. Worker wages increased marginally after training, but the quality of care decreased. Anecdotal evidence suggests that participating workers were systematically promoted out of the direct-care positions in which they had the most influence on quality of care.

Economics

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