Health inequality and health types

Although health affects many economic outcomes, its dynamics are still poorly understood. We use k-means clustering, a machine learning technique, and data from the Health and Retirement Study to identify health types during middle and old age. We identify five health types: the vigorous resilient, the fair-health resilient, the fair-health vulnerable, the frail resilient, and the frail vulnerable. They are characterized by different starting health and health and mortality trajectories. Our five health types account for 84% of the variation in health trajectories and are not explained by observable characteristics, such as age, marital status, education, gender, race, health-related behaviours, and health insurance status, but rather by one’s past health dynamics. We also show that health types are important drivers of health and mortality heterogeneity and dynamics.