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A theory of medical effectiveness, differential mortality, income inequality and growth for pre-industrial England

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  • DE LA CROIX, David
  • SOMMACAL, Alessandro

Abstract

The interactions between mortality reductions and income growth are studied, with a special attention at their relationship prior to the Industrial Revolution, when income per head was stagnant. The choice of individual medical spending is modelled, giving a rationale for individual health expenditures even when medicine is not effective in postponing death. The rise of effective medicine is then explained by a learning process function of expenditure on health. The rise in effective medicine is linked to the economic growth of the eighteenth century through life expectancy increases which foster capital accumulation. The rise of effective medicine has also had an effect on the relationship between growth and inequality and on the intergenerational persistence of differences in income. These channels are operative through differential mortality induced by medical effectiveness that turns out to determine a differential in the propensity to save among income groups.

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Paper provided by Université catholique de Louvain, Center for Operations Research and Econometrics (CORE) in its series CORE Discussion Papers RP with number -2103.

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Handle: RePEc:cor:louvrp:-2103

Note: In : Mathematical Population Studies, 16, 2-35, 2009
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  1. Raouf BOUCEKKINE & David DE LA CROIX & Omar LICANDRO, 2002. "Early Mortality Declines at the Dawn of Modern Growth," Economics Working Papers, European University Institute ECO2002/11, European University Institute.
  2. Nicolini, Esteban A., 2004. "Mortality, interest rates, investment, and agricultural production in 18th century England," Explorations in Economic History, Elsevier, Elsevier, vol. 41(2), pages 130-155, April.
  3. Galor, Oded & Moav, Omer, 1999. "From Physical to Human Capital Accumulation: Inequality in the Process of Development," CEPR Discussion Papers, C.E.P.R. Discussion Papers 2307, C.E.P.R. Discussion Papers.
  4. de la Croix, David & Licandro, Omar, 1999. "Life expectancy and endogenous growth," Economics Letters, Elsevier, Elsevier, vol. 65(2), pages 255-263, November.
  5. Amparo Castelló-Climent & Rafael Doménech, 2008. "Human Capital Inequality, Life Expectancy And Economic Growth," Economic Journal, Royal Economic Society, Royal Economic Society, vol. 118(528), pages 653-677, 04.
  6. Robinson, James A & Verdier, Thierry, 2002. "The Political Economy of Clientelism," CEPR Discussion Papers, C.E.P.R. Discussion Papers 3205, C.E.P.R. Discussion Papers.
  7. Olivier Morand, 2004. "Economic growth, longevity and the epidemiological transition," The European Journal of Health Economics, Springer, Springer, vol. 5(2), pages 166-174, May.
  8. Galor, Oded & Moav, Omer, 2005. "Natural Selection and the Evolution of Life Expectancy," CEPR Discussion Papers, C.E.P.R. Discussion Papers 5373, C.E.P.R. Discussion Papers.
  9. Chakraborty, Shankha, 2004. "Endogenous lifetime and economic growth," Journal of Economic Theory, Elsevier, Elsevier, vol. 116(1), pages 119-137, May.
  10. Shankha Chakraborty & Mausumi Das, 2003. "Mortality, Human Capital and Persistent Inequality," Working papers 119, Centre for Development Economics, Delhi School of Economics.
  11. David N. Weil & Oded Galor, 2000. "Population, Technology, and Growth: From Malthusian Stagnation to the Demographic Transition and Beyond," American Economic Review, American Economic Association, American Economic Association, vol. 90(4), pages 806-828, September.
  12. Zhang, Junsen & Zhang, Jie & Lee, Ronald, 2001. "Mortality decline and long-run economic growth," Journal of Public Economics, Elsevier, Elsevier, vol. 80(3), pages 485-507, June.
  13. Matteo Cervellati & Uwe Sunde, 2005. "Human Capital Formation, Life Expectancy, and the Process of Development," American Economic Review, American Economic Association, American Economic Association, vol. 95(5), pages 1653-1672, December.
  14. Galor, Oded & Weil, David, 1999. "From Malthusian Stagnation to Modern Growth," CEPR Discussion Papers, C.E.P.R. Discussion Papers 2082, C.E.P.R. Discussion Papers.
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Cited by:
  1. Omar Licandro & David de la Croix, 2009. "The Child is Father of the Man: Implications for the Demographic Transition," UFAE and IAE Working Papers, Unitat de Fonaments de l'Anàlisi Econòmica (UAB) and Institut d'Anàlisi Econòmica (CSIC) 765.09, Unitat de Fonaments de l'Anàlisi Econòmica (UAB) and Institut d'Anàlisi Econòmica (CSIC).
  2. repec:hal:wpaper:halshs-00676492 is not listed on IDEAS
  3. Fabio Mariani & Agustin Pérez-Barahona & Natacha Raffin, 2008. "Life expectancy and the environment," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) halshs-00318677, HAL.
  4. DE LA CROIX, David, . "Adult longevity and economic take-off from Malthus to Ben-Porath," CORE Discussion Papers RP, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE) -2108, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
  5. PESTIEAU, Pierre & PONTHIERE, Grégory, . "The public economics of increasing longevity," CORE Discussion Papers RP, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE) -2464, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
  6. Thomas Seegmuller & Stefano Bosi, 2010. "Mortality Differential, Labor Taxation And Growth: What Do We Learn From The Barro-Becker Model?," Working Papers halshs-00472732, HAL.

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