Gabriella Conti, James J. Heckman, Sergio Urzua

This paper examines the early origins of observed health disparities by education. We determine the role played by cognitive, noncognitive and early health endowments, and we identify the causal effect of education on health and health-related behaviors. We show that family background characteristics, cognitive, noncognitive and health endowments developed as early as age 10 are important determinants of health disparities at age 30. We also show that not properly accounting for personality traits overestimates the importance of cognitive ability in determining later health. We show that selection explains more than half of the observed difference in poor health, depression and obesity, while education has an important causal effect in explaining differences in smoking rates. We also uncover significant gender differences. We then go beyond the current literature which usually estimates mean effects to compute distributions of treatment effects. We show how the health returns to education can vary also among individuals who are similar in their observed characteristics, and how a mean effect can hide gains and losses for different individuals. This analysis highlights the crucial role played by the early years in promoting health and the importance of prevention in the reduction of health disparities, and refocuses the role of education policy as health policy.

JEL Codes
I12: Health Production
I21: Analysis of Education
C31: Multiple or Simultaneous Equation Models: Cross-Sectional Models; Spatial Models; Treatment Effect Models; Quantile Regressions; Social Interaction Models
cognitive ability
personality traits
health endowments
factor models
treatment effects