We consider the covariance structure of health. Agents report their health status on the basis of a latent health stock that is determined by permanent and transitory shocks, and time invariant fixed effects. At age 25, permanent shocks account for 5% to 10% of the variation in health. At age...

This paper investigates the evolution of health over the life-cycle using the Panel Study of Income Dynamics. We allow for two sources of persistence: unobserved heterogeneity and state dependence. The former is modeled by discrete “types.” Estimation indicates that there are at least four...

Interest in the effect of sampling and temporal aggregation on empirical results in macroeconomics and finance is growing. While the effects on the order of ARIMA representations are well known in the literature, the effects on model parameters are not, with a few exceptions. This paper presents...

We investigate the evolution of health inequality over the life-course. Health is modeled as a latent variable that is determined by three factors: endowments, and permanent and transitory shocks. We employ Simulated Minimum Distance and the Panel Study of Income Dynamics to estimate the model....

In this paper, we use longitudinal data on Self-Reported Health Status from the Panel Study of Income Dynamics to estimate a model of the evolution of health over the life-cycle. The model allows for two sources of persistence in health: unobserved heterogeneity, which models an individual’s...