Abstract

This study provides empirical evidence regarding to the relationship between household income and individual health, as well as the correlation between health and education at provincial level. We apply the concept of human health capital theory into models which treat health as a form of human capital in income process and education progress. We employ two datasets, one is Vietnam Household Living Standard Survey wave in 2002, 2004 and 2006, and the other is the dataset for provincial level in the year 1999, 2002 and 2004, in order to make two panels. Constructing panels allow us to exploit “within” variation in health, income and education to figure out the possible unobservable biased estimates of the impact of health on income and education on health in a short period of panel data. Household income is significantly affected by individual health and life expectancy is considerably influenced by education. These findings could be seen as evidence for policy makers in health and education policy in the context of development planning.

Highlights

  • Since the mid of 1980s, Vietnam has experienced a transformation from central planning economy to marketoriented economy

  • There are a number of factors that can be seen as critical determinants of rapid growth

  • Level In order to analyze the relationship between health and education at provincial level, we use data at provincial level with life expectancy variable is proxied for health and the rate of illiterate people as a proxy for education

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Summary

Introduction

Since the mid of 1980s, Vietnam has experienced a transformation from central planning economy to marketoriented economy. There is a lack of study on the role of health human capital, which is usually shown as a critical determinant of labor’s productivity, on agricultural households’ income. When a farmer gets sick, it may be one day or longer, and he does not have any payment for sick-leave like laborers who are active in non-agricultural sector This situation could be seen as a weak point of public policy when the government does not provide any health insurance to this part of their citizens. Microeconomic theory suggests that productivity of laborer tends to converge to the real wage at the equilibrium of labor market This assumption, doesn’t always hold in the context of urban area, where sometimes the wage rate of laborer is not driven by demand and supply sides. The last section will provide a discussion about the major findings, implications and limitation of the study

The Relationship between Health and Income
The Effects of Health on Productivity
Economic Effects of Health
Data and Model
Models
Life Expectancy—Illiterate Model at Provincial
Descriptive Statistics
Individual Health—household Income Model
Life Expectancy—Education Model at Provincial Level
Individual Health—Household Income Model
Life Expectancy—Education Model at
Conclusions

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