Health Inequality over the Lifecycle

We investigate the evolution of health inequality over the life-course. Health is modeled as a latent variable that is determined by three factors: endow-ments, and permanent and transitory shocks. We employ Simulated Minimum Distance and the Panel Study of Income Dynamics to estimate the model. We estimate that permanent shocks account for under 10 % of the total variation in health for the colleged educated, but between 35 % and 70 % of total health variability for people without college degrees. Consistent with this, we fin