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A theory of dynamics and inequalities under epidemics Author info | Abstract | Publisher info | Download info | Related research | Statistics Raouf Boucekkine
Jean-Pierre Laffargue
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We develop a tractable general theory for the study of the economic and demographic impact of epidemics. In particular, we analytically characterise the short and medium term consequences of epidemics for population size, age pyramid, economic performance and income distribution. To this end, we develop a three-period overlapping generations where altruistic parents choose optimal health expenditures for their children and themselves. The survival probability of (junior) adults and children depend on such investments. Agents can be skilled or unskilled. The model emphasizes the role of orphans. Ophans are not only penalized in front of death, they are also penalized in the access to education. Epidemics are modeled as one period exogenous shocks to the survival rates. We identify three kinds of epidemics depending on how the epidemic shock alters the marginal efficiency of health expenditures. We first study the demographic dynamics, and prove that while a one-period epidemic shock has no permanent effect on income distribution, it can perfectly alter it in the short and medium run. We then study the impact of the three kinds of epidemics when they hit children and/or junior adults. We prove that while the three epidemics have significantly different demographic implications in the medium run, they all imply a worsening in the short and medium run of economic performance and income distribution. In particular, the distributional implications of the model mainly rely on orphans: if orphans are more penalized in the access to a high level of education than in front of death, they will necessarily lead to the medium-term increase in the proportion of the unskilled, triggering the impoverishment of the economy at that time horizon.
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Paper provided by PSE (Ecole normale supérieure) in its series PSE Working Papers with number
2008-16.
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Paper Raouf Boucekkine & Jean-Pierre Laffargue, 2008.
"A theory of dynamics and inequalities under epidemics ,"
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2008_21, Department of Economics, University of Glasgow.
[Downloadable!] Raouf, BOUCEKKINE, 2007.
"A theory of dynamics and inequalities under epidemics ,"
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[Downloadable!] This paper has been announced in the following NEP Reports :
References listed on IDEAS Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile , click on "citations" and make appropriate adjustments.: Raouf Boucekkine & David de la Croix & Omar Licandro, .
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