Tracing the societal impact of variations in health: Three empirical contributions

Maiken Skovrider Aaskoven*

*Corresponding author for this work

Research output: ThesisPh.D. thesis

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Health is one of the most important dimensions of welfare. Variations in health will therefore have great societal implications. Adverse health events may impact individual’s and others’ opportunities and outcomes in life such as education, labour market participation, and overall well-being. Personal characteristics and social circumstances influence individuals’ ability to invest in health, which may make a significant difference when faced with adverse health events. In order to improve societal welfare, there is a need for a better understanding of adverse health events, to what extent they may impact the welfare of the individual and others, and whether there is heterogeneity in ability to cope with such events. These are the aims of this PhD thesis.

To fulfil the aims of the thesis, I utilise available observational data which enables me to approach causal inference in the absence of exogenous shocks. I exploit three comprehensive datasets including both survey data and register data which enables me to overcome some of the shortcomings of the individual data sources. Combining the versatility of the survey and the comprehensiveness of the registers generates highly enriched data which broadens the scope and quality of the research.

This thesis encompasses three empirical contributions that examine the societal impact of variations in health focusing on: 1) negative spillover effects of health shocks on the next generation’s human capital, 2) the impact of long-lasting health detriments on individual utility, and 3) the impact of health on individual productivity.

Paper I studies the intergenerational transmission of human capital. A rich longitudinal registerbased dataset of Danish children is utilised to investigate whether severe parental health shocks affect children’s school achievements. Coarsened exact matching is used in combination with parametric models to control for potential endogeneity. Strength of the shock is measured using cancer specific survival rates independent of stage at diagnosis. There are significant negative (although small) effects of a parental health shock on children’s basic school grades as well as their likelihood of commencing and completing secondary education. The risk of attenuated educational attainment appears stronger in the case of severe parental cancer (i.e., poor prognosis) and parental cancer death. More detailed analyses indicate a presence of mainly mortality, but also morbidity effects. There is heterogeneity with respect to the children’s gender and age and gender of the ill parent, but no effects v of family-related resilience factors such as child’s ethnicity or parental education level. The effects appear to be driven by non-pecuniary costs such as time and emotional investments rather than by pecuniary costs.

Paper II studies the impact of long-lasting health detriments on individual utility. A cross-sectional survey of Danish citizens aged 50-80 is used in combination with administrative register data to investigate the association between chronic illness and subjective wellbeing (SWB) among the elderly. Six common chronic illnesses are identified using an algorithm: asthma, COPD, rheumatoid arthritis, osteoporosis, type 1 and type 2 diabetes. The Personal Well-being Index (PWI) is used to measure SWB in seven domains of life: standard of living, personal health, achieving in life, personal relationships, personal safety, community connectedness, and future security. To mitigate endogeneity, OLS is employed and adjusted for numerous confounders such as socio-economics and personality traits. A range of heterogeneity analyses explore the role of 16 personal characteristics as moderators of the relationship between SWB and chronic illness. Furthermore, two possible sources of variation in SWB are examined. There is a significant negative association between chronic illness and elderly’s SWB. All the included domains of life are affected by chronic illness. There is little evidence of personal characteristics moderating the association between SWB and chronic illness, although some tendencies are seen for ethnicity, extraversion, emotional stability, openness to experiences, and internal health locus of control. Heterogeneity in SWB across personal characteristics may be explained by poorer health state and in some cases by differential marginal utility of health. 

Paper III studies how variations in health affect labour market participation. Several countries, including Denmark, face demographics changes that threatens the financial sustainability of the pension systems. Therefore, they have linked the statutory retirement age with increases in life expectancy. The implicit assumption is that older workers have the health capacity to work longer. The validity of the assumption is examined as well as the fairness of pension systems that link the statutory retirement age with increases in average life expectancy. The combination of the Survey of Health, Ageing and Retirement in Europe (SHARE) and Danish register data allows for composite health indices that an extensive range of health indicators. Health capacity to work is estimated using the Cutler et al. (2013) method. Health capacity is decomposed into physical and mental health as well as subjective and objective health. Health capacity to work is investigated across educational vi and occupational attainment. Substantial additional work capacity is found for older Danes aged 55 and above, indicating that individuals retire for reasons beyond health. Depending on the type of health index applied, the health capacity to work varies, especially at the individual level. There is evidence of an educational and an occupation gradient in ability to work.

Overall, this thesis shows that variations in health impact societal welfare, even in a society with an extended welfare system. Individual utility and productivity are reduced when faced with health detriments and there are negative spillover effects on the next generation’s human capital. Some personal characteristics drive individuals’ ability cope with adverse health events. Both mental and physical health affect welfare, and strength and trajectory of adverse health events modify the impact of such events. These findings may guide policy makers. Finally, this thesis demonstrates how rich observational register data and survey data can be used for policy-relevant research and for inferring plausible causal effects. 
Original languageEnglish
Awarding Institution
  • University of Southern Denmark
  • Gyrd-Hansen, Dorte, Principal supervisor
  • Kjær, Trine, Co-supervisor
Date of defence25. Nov 2021
Publication statusPublished - Aug 2021


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