The Dynamics of Health and Its Determinants among Older Adults

Younoh Kim, University of Southern California

This paper examines the extent to which previous health matters in determining current health among the elderly, using Indonesian Family Life Survey (IFLS). To address the endogeneity issue that arises from the potential correlation between lagged health measures and un-observables, I employ the first-difference two-step generalized method of moments(FD-GMM). My results find that health has path dependence, though the magnitude is not very strong and unobserved characteristics play important roles. By disaggregating groups across age, education, and per capita household expenditure level (PCE), I also find that those with less education are less likely to overcome previous health problems.