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A Theory of Medecine Effectiveness, Differential Mortality, Income Inequality and Growth for Pre-Industrial England

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  • David, DE LA CROIX

    (UNIVERSITE CATHOLIQUE DE LOUVAIN, Department of Economics)

  • Alessandro, SOMMACAL

Abstract

We study how mortality reductions and income growth interact, looking at their relationship prior to the Industrial Revolution, when income per capita was stagnant. We first present a model of individual medical spending giving a rationale for individual health expenditures even when medecine was not effective in postponing death. We then explain the rise of effective medecine by a learning process function of expenditures in health. The rise in effective medicine can then be linked to the take-off of the eighteenth century through life expectancy increases, and fostered capital accumulation. The rise of effective medecine has also an impact on the relation between growth and inequality and on the intergenerational persistence of differences in income. These channels are operative through differential mortality induced by medecine effectiveness that turns out to determines a differential in the propensity to save among income groups

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Bibliographic Info

Paper provided by Université catholique de Louvain, Département des Sciences Economiques in its series Discussion Papers (ECON - Département des Sciences Economiques) with number 2006025.

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Length: 34
Date of creation: 01 May 2006
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Handle: RePEc:ctl:louvec:2006025

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Keywords: Differential mortality; Life expectancy; Propensity to save; Health expenditures;

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  1. David de la Croix & Omar Licandro, . "Life expectancy and endogenous growth," Working Papers 97-23, FEDEA.
  2. Galor, Oded & Moav, Omer, 1999. "From Physical to Human Capital Accumulation: Inequality in the Process of Development," CEPR Discussion Papers 2307, C.E.P.R. Discussion Papers.
  3. Raouf BOUCEKKINE & David de la Croix & Omar LICANDRO, 2002. "Early mortality declines at the dawn of modern growth," Discussion Papers (IRES - Institut de Recherches Economiques et Sociales) 2002014, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES).
  4. Blackburn, Keith & Cipriani, Giam Pietro, 2002. "A model of longevity, fertility and growth," Journal of Economic Dynamics and Control, Elsevier, vol. 26(2), pages 187-204, February.
  5. Amparo Castelló-Climent & Rafael Doménech, 2008. "Human Capital Inequality, Life Expectancy And Economic Growth," Economic Journal, Royal Economic Society, vol. 118(528), pages 653-677, 04.
  6. Zhang, Junsen & Zhang, Jie & Lee, Ronald, 2001. "Mortality decline and long-run economic growth," Journal of Public Economics, Elsevier, vol. 80(3), pages 485-507, June.
  7. Olivier F. Morand, 2002. "Economic Growth, Longevity, and the Epidemiological Transition," Working papers 2002-07, University of Connecticut, Department of Economics.
  8. Matteo Cervellati & Uwe Sunde, 2005. "Human Capital Formation, Life Expectancy, and the Process of Development," American Economic Review, American Economic Association, vol. 95(5), pages 1653-1672, December.
  9. Lindert, Peter H., 2000. "Three centuries of inequality in Britain and America," Handbook of Income Distribution, in: A.B. Atkinson & F. Bourguignon (ed.), Handbook of Income Distribution, edition 1, volume 1, chapter 3, pages 167-216 Elsevier.
  10. Shankha Chakraborty, 2002. "Endogenous Lifetime and Economic Growth," University of Oregon Economics Department Working Papers 2002-03, University of Oregon Economics Department, revised 26 Jan 2002.
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  12. Shankha Chakraborty & Mausumi Das, 2003. "Mortality, Human Capital and Persistent Inequality," University of Oregon Economics Department Working Papers 2003-11, University of Oregon Economics Department.
  13. Cervellati, Matteo & Sunde, Uwe, 2005. "Human capital formation, life expectancy, and the process of development," Munich Reprints in Economics 20083, University of Munich, Department of Economics.
  14. Sebnem Kalemli-Ozcan, 2002. "Does the Mortality Decline Promote Economic Growth?," Macroeconomics 0212008, EconWPA.
  15. Fogel, Robert W, 1994. "Economic Growth, Population Theory, and Physiology: The Bearing of Long-Term Processes on the Making of Economic Policy," American Economic Review, American Economic Association, vol. 84(3), pages 369-95, June.
  16. Nils-Petter Lagerl–f, 2003. "From Malthus to Modern Growth: Can Epidemics Explain the Three Regimes?," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 44(2), pages 755-777, 05.
  17. David N. Weil & Oded Galor, 1999. "From Malthusian Stagnation to Modern Growth," American Economic Review, American Economic Association, vol. 89(2), pages 150-154, May.
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  20. repec:rus:hseeco:71105 is not listed on IDEAS
  21. Nicolini, Esteban A., 2004. "Mortality, interest rates, investment, and agricultural production in 18th century England," Explorations in Economic History, Elsevier, vol. 41(2), pages 130-155, April.
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Cited by:
  1. Pierre Pestieau & Gregory Ponthiere, 2012. "The Public Economics of Increasing Longevity," Hacienda Pública Española, IEF, vol. 200(1), pages 41-74, March.
  2. David de la Croix & Omar Licandro, 2007. "‘The Child is Father of the Man:’ Implications for the Demographic Transition," Economics Working Papers ECO2007/05, European University Institute.
  3. Mariani, Fabio & Pérez-Barahona, Agustín & Raffin, Natacha, 2010. "Life expectancy and the environment," Journal of Economic Dynamics and Control, Elsevier, vol. 34(4), pages 798-815, April.
  4. David, DE LA CROIX, 2008. "Adult longevity and economic take-off : from Malthus to Ben-Porath," Discussion Papers (ECON - Département des Sciences Economiques) 2008031, Université catholique de Louvain, Département des Sciences Economiques.
  5. David de la Croix & Omar Licandro, 2008. "The Child is Father of the Man: by Implications for the Demographic Transition," Working Papers 2008-04, FEDEA.

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