Endogenous Health Care, Life Expectancy, and Economic Development
AbstractWe study the endogenous relationship between health care, life expectancy and output in a modified neoclassical growth model. While health care competes resources away from goods production, it prolongs life expectancy which in turn leads to higher capital accumulation. We show that savings and health care are complements in equilibrium, with both rising with economic development. Our model is therefore consistent with several stylized facts, namely, (i) countries spend more on health care as they prosper, (ii) individuals in rich countries tend to live longer, and (iii) population aging is more pronounced in rich countries. Moreover, through simulation, health care and health production technology are found to be growth and welfare enhancing.
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Bibliographic InfoPaper provided by Royal Economic Society in its series Royal Economic Society Annual Conference 2003 with number 218.
Date of creation: 04 Jun 2003
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life expectancy; health care; economic growth; population aging;
Find related papers by JEL classification:
- E13 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - Neoclassical
- E21 - Macroeconomics and Monetary Economics - - Macroeconomics: Consumption, Saving, Production, Employment, and Investment - - - Consumption; Saving; Wealth
- I12 - Health, Education, and Welfare - - Health - - - Health Production
- J10 - Labor and Demographic Economics - - Demographic Economics - - - General
- O11 - Economic Development, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
This paper has been announced in the following NEP Reports:
- NEP-ALL-2003-06-16 (All new papers)
- NEP-DEV-2003-06-16 (Development)
- NEP-EDU-2003-06-16 (Education)
- NEP-HEA-2003-06-16 (Health Economics)
- NEP-LAB-2003-06-16 (Labour Economics)
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- Husain, Muhammad Jami, 2010. "Contribution of health to economic development: A survey and overview," Economics - The Open-Access, Open-Assessment E-Journal, Kiel Institute for the World Economy, vol. 4(14), pages 1-52.
- Husain, Muhammad Jami, 2009. "Contribution of health to economic development: a survey and overview," Economics Discussion Papers 2009-40, Kiel Institute for the World Economy.
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