We investigate the evolution of health over the life-cycle. We allow for two sources of persistence: unobserved heterogeneity and state dependence. Estimation indicates that there is a large degree of heterogeneity. For half the population, there are modest degrees of state dependence...

We investigate the impact of exogenous income fluctuations on health using twenty years ofdata from the Panel Study of Income Dynamics using techniques from the literature on theestimation of dynamic panel data models....