Height & income: Labor returns of health in Mexico from 2000 to 2018

TL;DR

This study finds that better health, measured by adult height, leads to higher income in Mexico, suggesting health investments can boost social mobility.

Contribution

The study provides consistent estimates of health returns across four time points in Mexico using standardized surveys.

Findings

Returns to health were significant and positive for both men and women across all four surveys.

By 2018, each additional centimeter in height yielded 7.4% higher income for women and 9.3% for men.

Health investments during childhood may enhance social mobility by increasing health capital among the poor.

Abstract

Investment in health has been proposed as a mechanism to promote upward social mobility. Previous analyses have reported inconsistent estimates of the returns to investment in health in Mexico based on different models for different years. We aim to estimate returns for Mexico using data from four time points Adult height and labor income are drawn from the periodical national health and nutrition surveys–a group of relatively standardized surveys—that are representative of individuals living in the country in 2000, 2006, 2012 & 2018. These surveys collect anthropometric measurements and information on individuals’ labor income. We estimated Mincerian models separately for men and women using OLS, Heckman, instrumental variables, and Heckman with instrumental variables models. Our results indicate significant and positive returns to health for the four surveys, similar in magnitude across years for women and with variations for men. By 2018, returns to health were about 7.4% per additional centimeter in height for females and 9.3% for males. Investments in health and nutrition during childhood and adolescence that increase health capital–measured as adult height—may promote social mobility in Mexico and similar countries to the extent that these investments differentially increase health capital among the poor.

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