Health and human capital effects on income : evidence from the 2014 Community Health Survey of Canada

Abstract

The aim of this study is to measure the impact that individuals’ health and human capital has on their Income. We also want to measure the impact on income when health and human capital are interacting together. Using the data set, the 2014 Canadian Community Health Survey (CCHS), the paper examines the direct effects on an individual’s level of income when changes to their health and human capital indices are made. In accord with previous studies, the returns to income from our health index and our human capital index separately are found to be positive and statistically significant. When our heath index and human capital index interact together we see a small negative and statistically insignificant correlation between income and the interaction variable. These patterns are likely because more educated people tend to invest more into their health (Autor 2005), and therefore do not see significant returns from increasing their level of health.