The thesis is about the relationship between health and wealth. The goal is to show that they are connected to each other, and that improving health can lead to improve of wealth.
The first part discusses the effect of health on wealth and vice versa. It shows that better wealth is connected to better health and health increase lead to the wealth increase.
Then there is a theoretical model by Grossman (1972) and which was modified by Jacobson (2000). The model shows that the health is seen as a stock and that individual can invest into the health during the lifetime. The model shows also the change, when there is a family without children (partners can invest into each other’s health) and the family with a child (parents invest into child’s health). The wage and education effect is shown and developed by Grossman (1972). The increase in wage leads to increase in health, individual has more money to visit the doctors. The increase in education also leads to increase in health, but in this case individual gets more information on healthy lifestyle and follows it.
The literature review shows how education, social status, early childhood, family and nutrition affect the health. Better educated have better health and higher income. An additional year of education increases the life. Lower socioeconomic status increases the probability of consuming unhealthy goods and being less educated. The subjective social status affects the childhood, the mental health and the income. Family plays a crucial role: the mother’s health, parents education, family’s socioeconomic status effect the health of a child and the future income. The low birth weight, mental health problems in childhood and bad nutrition lead to problems in health in the future and lower income.
When the connection between health and wealth, and factors affecting the health are known, it is easier to implement policies to increase the total health and wealth. The healthy individual is more productive and it leads to economic growth, what is another topic and also widely discussed.
