Burcu DÜZGÜN ÖNCEL

How Good Is Your Health? Theoretical Explanations and Micro Evidence from Turkey on Socio-Economic Status & Health Nexus

2014

(Supervisor: A. Suut Doğruel )

ABSTRACT

Numerous studies have shown a strong relationship between health and socio-economic status (SES). People at low socio-economic status suffer a heavier burden of morbidity rates than their better-off counterparts. However SES is not a one dimensional concept and knowing which aspect of it affects health and how much more rapidly health declines for some individuals than others over life cycle are key to policy debate for building retirement schemes and social security systems. In this respect by using cross section data from 2010 for Turkey, the contribution of this study to the literature is three-fold: i)we depict SES gradient in health over life course by using different aspects of SES such as income, education and work status. ii)we develop a basic two-period life cycle model that accounts for the effects of SES on health. iii) we test our two-period model by estimating endogeneity corrected equations.

Results show that the bottom of SES hierarchy in Turkey are in much worse health than those at the top and average health among men is better than women. The health gradient exists whether income, education or work status is used as indicators of SES. We observe relatively wide SES gradient in health in middle ages and narrowing of it in old ages implying some mixture of cumulative advantage hypothesis and age-as-leverer hypothesis operates through life cycle. Second, our two-period theoretical setting shows that both labor and non-labor income have positive effects on health whereas the impact of education and work status depend on the relative sizes of the model parameters. Parameters being crucial in determination of health status would explain the differences among ages and genders. Lastly, estimation results present that age is the main determinant of health followed by income and education. Increase in work hours or being employed is insignificant for men while it increases the probability of poor health for women. Comparison between intensive and extensive margins of labor indicates that it is the change in employment, not work hours, that changes the probability of good health. Further underestimated income coefficients without endogeneity correction implies reverse causality is not a major issue for Turkish data and unobservable factors or error in measuring income plays an essential role in determining income-related health outcomes. We also observe that education has greater impact of health of women. Although we lack to monitor cohort effects and selective mortality due to data limitations, results of the study imply that policies directed at increasing equal income distribution, rising female education and thus labor force participation would improve health of the society as a whole.