Haveman, Robert; Wolfe, Barbara; Kreider, Brent; Stone, Mark

Journal of Health Economics No. 13 (1994): 163-182.

In this paper, we investigate the complex interrelations among work-time, wages, and health identified in the Grossman model of the demand
for health. Hansen's generalized method of moments techniques are employed to estimate a 3-equation simultaneous model designed to
capture the time dependent character of these interrelationships. We then estimate simpler models with more restrictive assumptions
commonly found in the literature and find substantial differences between these estimates and those from our simultaneous model. For
example, the positive relationship between work-time and health found in other studies disappears when the relevant simultaneities are taken
into account.