Health, Hours and Wages

  • Michael Grossman
  • Lee Benham
Part of the International Economic Association Series book series (IEA)


This paper has two purposes. The first is to obtain structural health parameters in wage and labor supply function based on a completely specified model of the determination of these two variables. The second is to examine how the estimated effects of health on labor market behavior are altered when health is made an endogenous variable. We hypothesize that an increase in health should raise market productivity, measured by the wage rate, and should also increase the amount of time available for work in the market. Health, itself should respond in a positive fashion to increases in variables associated with efficiency of production within the household, such as schooling, and to increases in utilization of market goods which enter into the production of good health. We examine three variables related to the level of medical utilization: physicians per capita in the county of residence; health insurance coverage; and utilization of preventive medical services.


Labor Force Labor Supply Wage Rate Labor Force Participation Shadow Price 
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Copyright information

© The International Economic Association 1974

Authors and Affiliations

  • Michael Grossman
    • 1
  • Lee Benham
    • 1
  1. 1.National Bureau of Economic ResearchNew YorkUSA

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