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Endogenous Mortality, Human Capital and Endogenous Growth

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Author Info
Osang, Thomas () (Department of Economics, Southern Methodist University)
Sarkar, Jayanta () (Department of Economics, Southern Methodist University)

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Abstract

We consider growth and welfare effects of lifetime-uncertainty in an economy with human capital-led endogenous growth. We argue that lifetime uncertainty reduces private incentives to invest in both physical and human capital. Using an overlapping generations framework with finite-lived households we analyze the relevance of government expenditure on health and education to counter such growth-reducing forces. We focus on three different models that differ with respect to the mode of financing of education: (i) both private and public spending, (ii) only public spending, and (iii) only private spending. Results show that models (i) and (iii) outperform model (ii) with respect to long-term growth rates of per capita income, welfare levels and other important macroeconomic indicators. Theoretical predictions of model rankings for these macroeconomic indicators are also supported by observed stylized facts.

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Publisher Info
Paper provided by Southern Methodist University, Department of Economics in its series Departmental Working Papers with number 0511.

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Length: 41 pages
Date of creation: 01 Sep 2005
Date of revision:
Handle: RePEc:smu:ecowpa:0511

Contact details of provider:
Postal: Department of Economics, P.O. Box 750496, Southern Methodist University, Dallas, TX 75275-0496
Phone: 214-768-2715
Fax: 214-768-1821
Web page: http://www.smu.edu/economics

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Related research
Keywords: Health; Life Expectancy; Human Capital; Public Spending; Endogenous Growth;

Other versions of this item:

Find related papers by JEL classification:
I1 - Health, Education, and Welfare - - Health
I2 - Health, Education, and Welfare - - Education
O1 - Economic Development, Technological Change, and Growth - - Economic Development
H5 - Public Economics - - National Government Expenditures and Related Policies

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  17. repec:rus:hseeco:71105 is not listed on IDEAS
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