Short-run and long-run persistence of bad health among elderly

We study the health dynamics among older Americans using tenwaves of the Health and Retirement Study following a spell-approach and aregression-based approach. The former is fully non parametric synthesizing thesequences of health status into a Health Persistence Index. The latter approachrelies on a Latent Markov (LM) model capturing persistence in poor health bymodelling time-varying unobserved heterogeneity. Our results show that onlyfew elders experiences persistently a poor health status. The higher values ofthe index are consistently observed with the main socio-demo-economic riskfactors. Moreover LM model indicates the existence of three unobserved groupsdiffering in their propensity to report poor health. The two approaches providevery similar insights on both persistence and unobserved pathways of ill/healthstatus, although their fundamental differences.