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Public and private expenditures on health in a growth model

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  • Bhattacharya, Joydeep
  • Qiao, Xue

Abstract

This paper introduces endogenous longevity into an otherwise standard overlapping generations model with capital. In the model, a young agent may increase the length of her old age by incurring investments in health. Such private health investments are assumed to be more ‘productive’ if accompanied by complementary tax-financed public health programs. The presence of the public input in private longevity is shown to expose the economy to aggregate endogenous fluctuations and even chaos, and such volatility is impossible in its absence. The model is capable of generating dramatic reversals in life expectancy as has been observed in many countries.

Suggested Citation

  • Bhattacharya, Joydeep & Qiao, Xue, 2007. "Public and private expenditures on health in a growth model," ISU General Staff Papers 200708010700001175, Iowa State University, Department of Economics.
    • Handle: RePEc:isu:genstf:200708010700001175
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    More about this item

    JEL classification:

    • E10 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - General
    • J10 - Labor and Demographic Economics - - Demographic Economics - - - General
    • O10 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - General
    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General

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