Schooling, cognitive ability and health

A large literature documents a strong correlation between health and educational outcomes. In this paper we investigate the role of cognitive ability in the health‐education nexus. Using NLSY data, we show that one standard deviation increase in cognitive ability is associated with roughly the same increase in health as two years of schooling and that cognitive ability accounts for roughly one quarter of the association between schooling and health. Both schooling and ability are strongly associated with health at low levels but less related or unrelated at high levels. Estimates treating schooling as endogenous to health suggest that much of the correlation between schooling and health is attributable to unobserved heterogeneity; the causal effect of schooling on health is large only for respondents with low levels of schooling and low cognitive ability. An implication is that policies which increase schooling will only increase health to the extent that they increase the education of poorly‐educated individuals. Subsidies to college education, for example, are unlikely to increase population health. Copyright © 2005 John Wiley & Sons, Ltd.