This paper presents a model of human capital accumulation that allows for feedback effects between the consequences and the likelihood of suffering from particular diseases and the decisions to invest in knowledge, both in the form of schooling and on-the-job training. I use a calibrated version...

How should society allocate health-care resources across individuals? In what ways is the current allocation of health-care inefficient? In this paper we study a model in which health status affects probability of survival and individuals are heterogeneous with respect to their labor...