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Economic growth and stagnation with endogenous health and fertility

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  • Holger Strulik

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Abstract

This article offers a theory of economic growth, stagnation, and demo-economic transition that originates from external effects of child-bearing, health expenditure, and education under endogenous mortality. Facing a hierarchy of needs, parents always consume and want to have a family. Child quality, measured as a two-dimensional vector of child health and schooling, becomes only affordable when uncontrollable mortality is sufficiently low. Child quality expenditure initiates an economic take-off and convergence towards perpetual growth while its absence may cause convergence towards an equilibrium of economic stagnation and high fertility. This way, the article provides an explanation for diverging growth rates from a cross-country perspective. Copyright Springer-Verlag 2004

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Bibliographic Info

Article provided by Springer in its journal Population Economics.

Volume (Year): 17 (2004)
Issue (Month): 3 (08)
Pages: 433-453

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Handle: RePEc:spr:jopoec:v:17:y:2004:i:3:p:433-453

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Keywords: J10; J13; O11; O12; Demographic transition; stages of development; geography; health;

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References

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  1. Robert J. Barro, 2012. "Inflation and Economic Growth," CEMA Working Papers, China Economics and Management Academy, Central University of Finance and Economics 568, China Economics and Management Academy, Central University of Finance and Economics.
  2. Tamura, Robert, 1996. "From decay to growth: A demographic transition to economic growth," Journal of Economic Dynamics and Control, Elsevier, Elsevier, vol. 20(6-7), pages 1237-1261.
  3. Angus Deaton, 2002. "Health, inequality, and economic development," Working Papers 270, Princeton University, Woodrow Wilson School of Public and International Affairs, Center for Health and Wellbeing..
  4. Lant Pritchett & Lawrence H. Summers, 1996. "Wealthier is Healthier," Journal of Human Resources, University of Wisconsin Press, vol. 31(4), pages 841-868.
  5. John Luke Gallup & Jeffrey D. Sachs & Andrew D. Mellinger, 1998. "Geography and Economic Development," NBER Working Papers 6849, National Bureau of Economic Research, Inc.
  6. Oded Galor & David N. Weil, 1998. "Population, Technology, and Growth: From the Malthusian Regime to the Demographic Transition," Working Papers 98-1, Brown University, Department of Economics, revised 19 Aug 1998.
  7. Ehrlich, Isaac & Lui, Francis T, 1991. "Intergenerational Trade, Longevity, and Economic Growth," Journal of Political Economy, University of Chicago Press, University of Chicago Press, vol. 99(5), pages 1029-59, October.
  8. Tamura, Robert, 1994. "Fertility, Human Capital and the Wealth of Families," Economic Theory, Springer, Springer, vol. 4(4), pages 593-603, May.
  9. Oded Galor & David N. Weil, 1998. "Population, Technology, and Growth: From the Malthusian Regime to the Demographic Transition and Beyond," NBER Working Papers 6811, National Bureau of Economic Research, Inc.
  10. anonymous, 1995. "Growth continues for Florida," Regional Update, Federal Reserve Bank of Atlanta, issue Oct, pages 8-10.
  11. Alessandro Cigno, 1998. "Fertility decisions when infant survival is endogenous," Journal of Population Economics, Springer, Springer, vol. 11(1), pages 21-28.
  12. Rodrik, Dani & Subramanian, Arvind & Trebbi, Francesco, 2002. "Institutions Rule: The Primacy of Institutions Over Geography and Integration in Economic Development," CEPR Discussion Papers 3643, C.E.P.R. Discussion Papers.
  13. Jeffrey D. Sachs, 2003. "Institutions Don't Rule: Direct Effects of Geography on Per Capita Income," NBER Working Papers 9490, National Bureau of Economic Research, Inc.
  14. David E. Bloom & Jeffrey D. Sachs, 1998. "Geography, Demography, and Economic Growth in Africa," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 29(2), pages 207-296.
  15. Rosenzweig, Mark R & Wolpin, Kenneth I, 1980. "Testing the Quantity-Quality Fertility Model: The Use of Twins as a Natural Experiment," Econometrica, Econometric Society, Econometric Society, vol. 48(1), pages 227-40, January.
  16. Deaton, Angus S & Muellbauer, John, 1986. "On Measuring Child Costs: With Applications to Poor Countries," Journal of Political Economy, University of Chicago Press, University of Chicago Press, vol. 94(4), pages 720-44, August.
  17. Andreoni, James, 1989. "Giving with Impure Altruism: Applications to Charity and Ricardian Equivalence," Journal of Political Economy, University of Chicago Press, University of Chicago Press, vol. 97(6), pages 1447-58, December.
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Citations

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Cited by:
  1. Holger Strulik & Sebastian Vollmer, 2010. "The Fertility Transition Around the World - 1950-2005," PGDA Working Papers, Program on the Global Demography of Aging 5710, Program on the Global Demography of Aging.
  2. Fanti, Luciano & Gori, Luca, 2010. "Public health spending, old-age productivity and economic growth: chaotic cycles under perfect foresight," MPRA Paper 21335, University Library of Munich, Germany.
  3. Edgar Vogel, 2009. "From Malthus to modern growth: child labor, schooling and human capital," MEA discussion paper series, Munich Center for the Economics of Aging (MEA) at the Max Planck Institute for Social Law and Social Policy 09180, Munich Center for the Economics of Aging (MEA) at the Max Planck Institute for Social Law and Social Policy.
  4. Matteo Cervellati & Uwe Sunde, 2008. "The Economic and Demographic Transition, Mortality, and Comparative Development," University of St. Gallen Department of Economics working paper series 2008 2008-21, Department of Economics, University of St. Gallen.
  5. Salam Abdus & Peter Rangazas, 2011. "Adult Nutrition and Growth," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 14(4), pages 636-649, October.
  6. Strulik, Holger, 2007. "Geography, Health, and the Pace of Demo-Economic Development," Hannover Economic Papers (HEP) dp-361, Leibniz Universität Hannover, Wirtschaftswissenschaftliche Fakultät.
  7. Holger Strulik, 2005. "Geography, Health, and Demo-Economic Development," Discussion Papers 05-15, University of Copenhagen. Department of Economics.
  8. Corey Sparks, 2009. "An application of the variable-r method to subpopulation growth rates in a 19th century agricultural population," Demographic Research, Max Planck Institute for Demographic Research, Rostock, Germany, vol. 21(2), pages 23-64, July.
  9. repec:ebl:ecbull:v:10:y:2008:i:7:p:1-6 is not listed on IDEAS
  10. Currais, Luis & Rivera, Berta & Rungo, Paolo, 2010. "Effects of the complementarity of child nutrition and education on persistent deprivation," Economics Letters, Elsevier, vol. 106(1), pages 67-69, January.
  11. repec:ebl:ecbull:v:9:y:2008:i:7:p:1-7 is not listed on IDEAS
  12. Luciano Fanti & Mimmo Iannelli & Piero Manfredi, 2013. "Neoclassical growth with endogenous age distribution. Poverty vs low-fertility traps as steady states of demographic transitions," Journal of Population Economics, Springer, Springer, vol. 26(4), pages 1457-1484, October.
  13. repec:ebl:ecbull:v:10:y:2008:i:8:p:1-7 is not listed on IDEAS
  14. Katarina Keller, 2006. "Education Expansion, Expenditures per Student and the Effects on Growth in Asia," Global Economic Review, Taylor & Francis Journals, Taylor & Francis Journals, vol. 35(1), pages 21-42.

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