The Effects of Education on Health

March 2007

David M. Cutler E-mail: dcutler@harvard.edu

and Adriana Lleras-Muney E-mail: alleras@princeton.edu

"An additional four years of education lowers five-year mortality by 1.8 percentage points; it also reduces the risk of heart disease by 2.16 percentage points, and the risk of diabetes by 1.3 percentage points."

here is a well known, large, and persistent association between education and health. This has been observed in many countries and time periods, and for a wide variety of health measures. The differences between the more and the less educated are significant: in 1999, the age-adjusted mortality rate of high school dropouts ages 25 to 64 was more than twice as large as the mortality rate of those with some college. In Education and Health: Evaluating Theories and Evidence (NBER Working Paper No. 12352), authors David Cutler and Adriana Lleras-Muney review what we know about the relationship between education and health, in particular about the possible causal relationships between education and health and the mechanisms behind them. At the outset they note that this is a controversial topic, with previous studies offering contradictory conclusions. People value health highly. As a result, the health returns to education can outweigh even the financial returns. Many estimates suggest that a year of education raises earnings by about 10 percent, or perhaps $80,000 in present value over the course of a lifetime. Using data from the National Longitudinal Mortality Study (NLMS), the authors find that one more year of education increases life expectancy by 0.18 years, using a 3 percent discount rate, or by 0.6 years without any discounting. Assuming that a year of health is worth $75,000 - a relatively conservative value - this translates into about $13,500 to $44,000 in present value. These rough calculations suggest that the health returns to education increase the total returns to education by at least 15 percent, and perhaps by as much as 55 percent. The causal effects of education on health would call for education subsidies only to the extent that there is a market failure and that individuals are investing at sub-optimal levels; otherwise, individuals would be basing their education decisions on health benefits along with financial benefits. The possible rationales for education subsidies include the idea that individuals may be unaware of the health benefits of education when they make their education decisions, that they may be credit constrained, that some groups do not know about or are excluded from higher education, or that there are externalities to education and health beyond the individual affected. Understanding the mechanism by which education affects health is therefore important for policy. It may be more cost effective to tap that mechanism than to increase educational attainment. For example, if all of the education effect operated through income, and income improved health, then it might be cheaper to transfer income directly rather than to subsidize schooling. But, increasing educational attainment might be the correct policy response if, for example, there were no alternative (or cheaper) method for acquiring the skills that ultimately affect health. In spite of these caveats, the authors point out that education policies have the potential to have a substantial effect on health. Assuming that the observed correlations between education and health are long-term causal effects from education to health, and that the relationship is linear and identical across gender, race, and other groups, the authors can do a rough calculation of the health returns of education policies. Prior research has found that offering $1,000 (in 1998 dollars) in grant aid results in an increase in education of 0.16 years, which translates into 0.03-0.10 years of additional life (depending on discounting). This is roughly $2,250-$7,200 in present value. This is a very large rate of return. The data that the authors present show that the more educated report having lower morbidity from the most common acute and chronic diseases (heart condition, stroke hypertension, cholesterol, emphysema, diabetes, asthma attacks, ulcer). More educated people are less likely to be hypertensive, or to suffer from emphysema or diabetes. Physical and mental functioning is also better for the better educated. The better educated are substantially less likely to report that they are in poor health, and less likely to report anxiety or depression. Finally, better educated people report spending fewer days in bed or not at work because of disease, and they have fewer functional limitations. The magnitude of the relationship between education and health varies across conditions, but is generally large. An additional four years of education lowers five-year mortality by 1.8 percentage points; it also reduces the risk of heart disease by 2.16 percentage points, and the risk of diabetes by 1.3 percentage points. Four more years of schooling lowers the probability of reporting oneself in fair or poor health by 6 percentage points and reduces lost days of work to sickness by 2.3 each year. Although the effects of gender and race are not shown, the magnitude of four years of schooling is roughly comparable in size to being female or being African American. These are not trivial effects. There are multiple reasons for these associations, although it is likely that these health differences are in part the result of differences in behavior across education groups. In terms of the relation between education and various health risk factors - smoking, drinking, diet/exercise, use of illegal drugs, household safety, use of preventive medical care, and care for hypertension and diabetes - overall the results suggest very strong gradients where the better educated have healthier behaviors along virtually every margin, although some of these behaviors may also reflect differential access to care. Those with more years of schooling are less likely to smoke, to drink heavily, to be overweight or obese, or to use illegal drugs. Interestingly, the better educated report having tried illegal drugs more frequently, but they gave them up more readily -- Les Picker

http://papers.nber.org/papers/W12352