Why does Health Share of Income Increase over Time?
AbstractThis paper deals with the view that income elasticity of health care is larger than one, as argued by empirical results on the literature. We build a theoretical model that shows that endogenous demographic transition may play a fundamental role on this result. It is argued that families must choose the number and the life expectancy of their members. Due to limited resources, there is a trade-o. between those two variables though. It is shown that increases on income may produce a demographic transition that allows a larger allocation of resources to health care.
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Bibliographic InfoPaper provided by Instituto de Economia. Pontificia Universidad Católica de Chile. in its series Documentos de Trabajo with number 207.
Date of creation: 2002
Date of revision:
Health share of income; life expectancy; demographic transition;
Find related papers by JEL classification:
- I10 - Health, Education, and Welfare - - Health - - - General
- J11 - Labor and Demographic Economics - - Demographic Economics - - - Demographic Trends, Macroeconomic Effects, and Forecasts
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