Estimating the wider societal benefits of changes in health

There is renewed interest in the wider societal benefits of health interventions. Estimation of these effects should relate to changes in health rather than cross-sectional differences. We consider the impact of health on net State contributions, which include contributions to tax revenues and receipt of benefits. We subject cross-sectional differences in net contributions across health states to a more rigorous longitudinal analysis using the 1991-2008 British Household Panel Survey. We estimate the effects of 12 self-reported health problems on tax contributions and benefits received, controlling for several confounding factors and individual heterogeneity. We find cross-sectional differences in tax contributions and benefit receipts are substantially larger than those associated with changes in health. Changes in depression have the largest impact on net contributions. Estimates of net resource contributions should be based on longitudinal analysis to avoid overstating the wider societal benefits of health interventions.