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Life expectancy and economic growth

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  • Kunze, Lars

Abstract

This paper investigates the relationship between life expectancy and economic growth in an overlapping generations model with family altruism where private and public investments in human capital of children are the engine of endogenous growth. Consistent with recent empirical evidence, our model provides a theoretical case of a non-linear pattern between life expectancy and economic growth. However, it is also shown that the emergence of such a pattern critically depends on the existence of intergenerational transfers in form of bequests. Specifically, we find that rising life expectancy unambiguously decreases growth if bequests are operative, whereas there exists an inverted-U shape relationship in economies where bequests are inoperative.

Suggested Citation

  • Kunze, Lars, 2014. "Life expectancy and economic growth," Journal of Macroeconomics, Elsevier, vol. 39(PA), pages 54-65.
  • Handle: RePEc:eee:jmacro:v:39:y:2014:i:pa:p:54-65
    DOI: 10.1016/j.jmacro.2013.12.004
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    References listed on IDEAS

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    Keywords

    Longevity; Growth; Education;

    JEL classification:

    • O41 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - One, Two, and Multisector Growth Models
    • H52 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Education
    • J11 - Labor and Demographic Economics - - Demographic Economics - - - Demographic Trends, Macroeconomic Effects, and Forecasts

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