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Health, education and endogenous growth

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Author Info

  • Zon,A.H.,van
  • Muysken,J.

    (MERIT)

Abstract

The purpose of the paper is to show that, from a growth perspective, government resources can be spent in two different ways. Resources can be allocated to uses which support growth, and to uses which generate growth. We take the provision of health services as an example of the first type of use, and the provision of educational services as an example of the second. This enables us to integrate both types of uses of scarce resources in an endogenous growth framework and to derive the optimum mix of the provision of health and educational services both from the perspective of health as a complement to growth and health as a substitute for growth. The model illustrates that there is a trade-off between growth as such and the provision of health-services. It also shows that a slow down in growth could be expected to occur when the preference for health is positively influenced by a growing income per head or in the case of an ageing population. Finally, we show that the model can account for a ’growth take off’ in countries which are too poor to save, and that this take off can be induced by ’just the right’ amount of income transfer to those countries : too little aid doesn’t seem to help at all, while too much aid unnecessarily burdens the long term solvability of the receiving country if aid is provided in the form of loans.

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Bibliographic Info

Paper provided by Maastricht : MERIT, Maastricht Economic Research Institute on Innovation and Technology in its series Research Memoranda with number 006.

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Date of creation: 1997
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Handle: RePEc:dgr:umamer:1997006

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Web page: http://www.maastrichtuniversity.nl/web/UMPublications.htm

Related research

Keywords: economic development an growth ;

References

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  1. Zon, Adriaan van, 1990. "Vintage capital and R&D based technological progress," Open Access publications from Maastricht University urn:nbn:nl:ui:27-22449, Maastricht University.
  2. Zon, Adriaan van & Muysken, Joan & Meijers, Huub, 1998. "Asymmetric skill substitution, labour market flexibility, and the allocation of qualifications," Open Access publications from Maastricht University urn:nbn:nl:ui:27-22459, Maastricht University.
  3. Daniel S. Hamermesh & James Grant, 1979. "Econometric Studies of Labor-Labor Substitution and Their Implications for Policy," Journal of Human Resources, University of Wisconsin Press, vol. 14(4), pages 543-562.
  4. Paul Romer, 1991. "Endogenous Technological Change," NBER Working Papers 3210, National Bureau of Economic Research, Inc.
  5. Nickell, Stephen & Bell, Brian, 1995. "The Collapse in Demand for the Unskilled and Unemployment across the OECD," Oxford Review of Economic Policy, Oxford University Press, vol. 11(1), pages 40-62, Spring.
  6. repec:fth:coluec:455 is not listed on IDEAS
  7. Mincer, J., 1989. "Human Capital Responses To Technological Change In The Labor Market," Discussion Papers 1989_38, Columbia University, Department of Economics.
  8. Jacob Mincer, 1989. "Human Capital Responses to Technological Change in the Labor Market," NBER Working Papers 3207, National Bureau of Economic Research, Inc.
  9. Lucas, Robert Jr., 1988. "On the mechanics of economic development," Journal of Monetary Economics, Elsevier, vol. 22(1), pages 3-42, July.
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Citations

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Cited by:
  1. Muysken,Joan & Yetkiner,I. Hakan & Ziesemer,Thomas, 1999. "Health, Labour Productivity and Growth," Research Memoranda 028, Maastricht : MERIT, Maastricht Economic Research Institute on Innovation and Technology.
  2. Xavier Pautrel, 2009. "Health-enhancing activities and the environment:How competition for resources make the environmental policy beneficial," Working Papers hal-00423323, HAL.
  3. Philippe Ulmann, 2004. "Est-il possible (souhaitable) de maîtriser les dépenses de santé ?," Revue d'Économie Financière, Programme National Persée, vol. 76(3), pages 19-37.
  4. Zon, Adriaan van & Muysken, Joan, 2001. "Health and endogenous growth," Open Access publications from Maastricht University urn:nbn:nl:ui:27-14918, Maastricht University.
  5. Peaucelle, Irina, 2001. "Economie et santé : où en est la Russie ?," CEPREMAP Working Papers (Couverture Orange) 0105, CEPREMAP.
  6. Hosoya, Kei, 2001. "Health, Longevity, and the Productivity Slowdown," Discussion Paper 25, Center for Intergenerational Studies, Institute of Economic Research, Hitotsubashi University.

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