Reassessing human capital and health capital over the life course

• In Event: 21020 - Section on Sociology of Education Roundtables
  In Refereed Roundtable (60 minute): Table 10: Education and the Labor Market

Abstract

The wage return to education has long been explained by human capital theory. However, little is known about the relationship between education and economic gains through improved health, another key component of human capital. This paper uses data from the National Longitudinal Survey of Youth 1979 in the United States to reassess the economic value of education from a life course perspective, focusing on the interplay of college completion, health, and wages. Causal mediation analysis with the recentered influence function first illuminates substantial returns to education, net of health mediation, particularly for upper quantiles of the wage distribution (e.g., college completion is linked to approximately a 0.3 increase in log hourly wages on average). Nevertheless, as individuals age over 20 years from their mid-thirties, the mediating role of health increases, albeit with a relatively small magnitude, accounting for over 9% of the total effect estimates in their mid-fifties. This indirect contribution of education through health capital is especially evident within the lower to middle wage quantiles. These results suggest that college completion as such demonstrates a boosting effect on higher wages throughout one’s career, whereas the pathway along enhanced health serves as a protective factor against falling into lower wage strata later in life.

Author

• Satoshi Araki, University of Hong Kong