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The relationship between health and growth:when Lucas meets Nelson-Phelps

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  • Philippe Aghion

    (Harvard University)

  • Peter Howitt

    (Brown University)

  • Fabrice Murtin

    (OECD)

Abstract

This paper revisits the relationship between health and growth in light of modern endogenous growth theory. We propose a unified framework that encompasses the growth effects of both the rate of improvement of health and the level of health. Based on cross-country regressions over the period 1960-2000, where we instrument for both variables, we find that a higher initial level and a higher rate of improvement in life expectancy both have a significantly positive impact on per capita GDP growth. Then, restricting attention to OECD countries, we find supportive evidence that only the reduction in mortality below age forty generates productivity gains, which in turn may explain why the positive correlation between health and growth in cross-OECD country regressions appears to have weakened since 1960.

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Bibliographic Info

Paper provided by Observatoire Francais des Conjonctures Economiques (OFCE) in its series Documents de Travail de l'OFCE with number 2009-28.

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Date of creation: Nov 2009
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Handle: RePEc:fce:doctra:0928

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  1. Sandra E Black & Paul J Devereux & Kjell G Salvanes, 2007. "From the Cradle to the Labor Market? The Effect of Birth Weight on Adult Outcomes," The Quarterly Journal of Economics, MIT Press, vol. 122(1), pages 409-439, 02.
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  9. Hoyt Bleakley, 2007. "Disease and Development: Evidence from Hookworm Eradication in the American South," The Quarterly Journal of Economics, MIT Press, vol. 122(1), pages 73-117, 02.
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Cited by:
  1. Cervellati, Matteo & Sunde, Uwe, 2009. "Life Expectancy and Economic Growth: The Role of the Demographic Transition," CEPR Discussion Papers 7361, C.E.P.R. Discussion Papers.
  2. Volker Grossmann, 2011. "Do Cost-sharing and Entry Deregulation Curb Pharmaceutical Innovation?," CESifo Working Paper Series 3439, CESifo Group Munich.
  3. Sunde, Uwe & Vischer, Thomas, 2011. "Human Capital and Growth: Specification Matters," IZA Discussion Papers 5991, Institute for the Study of Labor (IZA).
  4. Basseti, Thomas & Benos, Nikos & Karagiannis, Stelios, 2010. "How policy can influence human capital accumulation and environment quality," MPRA Paper 21754, University Library of Munich, Germany.
  5. Hansen, Casper Worm & Lønstrup, Lars, 2011. "Life expectancy and income: The Ben-Porath mechanism revisited," Discussion Papers of Business and Economics 3/2011, Department of Business and Economics, University of Southern Denmark.
  6. Hansen, Casper Worm, 2011. "The diffusion of health technologies: Cultural and biological divergence," Discussion Papers of Business and Economics 6/2011, Department of Business and Economics, University of Southern Denmark.
  7. Claire Loupias & Bertrand Wigniolle, 2011. "Population, land and growth," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) halshs-00609811, HAL.
  8. Strulik, Holger & Werner, Katharina, 2012. "Life expectancy, labor supply, and long-run growth: Reconciling theory and evidence," Center for European, Governance and Economic Development Research Discussion Papers 141, University of Goettingen, Department of Economics.
  9. Casper Worm Hansen, 2012. "Causes of mortality and development: Evidence from large health shocks in 20th century America," Economics Working Papers 2012-29, School of Economics and Management, University of Aarhus.
  10. Hansen, Casper Worm, 2012. "The relation between wealth and health: Evidence from a world panel of countries," Economics Letters, Elsevier, vol. 115(2), pages 175-176.
  11. David E. Bloom, 2011. "Population Dynamics in India and Implications for Economic Growth," PGDA Working Papers 6511, Program on the Global Demography of Aging.
  12. Michael Bar & Oksana Leukhina, 2010. "The role of mortality in the transmission of knowledge," Journal of Economic Growth, Springer, vol. 15(4), pages 291-321, December.
  13. Charles Jones & Pete Klenow, 2010. "Beyond GDP? Welfare Across Countries and Time," Discussion Papers 10-001, Stanford Institute for Economic Policy Research.
  14. Casper Hansen & Lars Lønstrup, 2012. "Can higher life expectancy induce more schooling and earlier retirement?," Journal of Population Economics, Springer, vol. 25(4), pages 1249-1264, October.
  15. Hassan, Gazi & Cooray, Arusha, 2012. "The effect of female and male health on economic growth: cross-country evidence within a production function framework," MPRA Paper 40083, University Library of Munich, Germany.
  16. Marcello Basili & Filippo Belloc, 2012. "How to Measure the Economic Impact of Vector-Borne Diseases at a Country Level: An Assessment," Department of Economics University of Siena 648, Department of Economics, University of Siena.

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