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Health, Education, And Life Cycle Savings In The Development Process

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  • KAM KI TANG
  • JIE ZHANG

Abstract

"This paper studies investment in health and human capital in a life cycle model. Health investment enhances survival to old age by improving health from its endowed level. The model predicts two distinctive phases of development. When income is low enough, the economy has no health investment and little savings, leading to slow growth. When income grows, health investment will become positive and the saving rate will rise, leading to higher life expectancy and faster growth. A health subsidy can move the economy from the first phase to the next. Subsidies on health and human capital investments can improve welfare." ("JEL" I00, J10, H50, O10) Copyright 2007 Western Economic Association International.

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Bibliographic Info

Article provided by Western Economic Association International in its journal Economic Inquiry.

Volume (Year): 45 (2007)
Issue (Month): 3 (07)
Pages: 615-630

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Handle: RePEc:bla:ecinqu:v:45:y:2007:i:3:p:615-630

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Cited by:
  1. Shuyun May Li & Solmaz Moslehi & Siew Ling Yew, 2012. "Public-Private Mix of Health Expenditure: A Political Economy Approach and A Quantitative Exercise," Development Research Unit Working Paper Series, Monash University, Department of Economics 11-12, Monash University, Department of Economics.
  2. Gong, Liutang & Li, Hongyi & Wang, Dihai, 2012. "Health investment, physical capital accumulation, and economic growth," China Economic Review, Elsevier, Elsevier, vol. 23(4), pages 1104-1119.
  3. Dimitrios Varvarigos, 2010. "Environmental Degradation, Longevity, and the Dynamics of Economic Development," Environmental & Resource Economics, European Association of Environmental and Resource Economists, European Association of Environmental and Resource Economists, vol. 46(1), pages 59-73, May.
  4. Rangan Gupta & Cobus Vermeulen, 2010. "Private and Public Health Expenditures in an Endogenous Growth Model with Inflation Targeting," Working Papers 201001, University of Pretoria, Department of Economics.
  5. Casper Hansen & Lars L√łnstrup, 2012. "Can higher life expectancy induce more schooling and earlier retirement?," Journal of Population Economics, Springer, Springer, vol. 25(4), pages 1249-1264, October.

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