IDEAS home Printed from https://ideas.repec.org/a/kap/jecgro/v30y2025i3d10.1007_s10887-024-09250-2.html
   My bibliography  Save this article

Public provision of healthcare and basic research: What are the joint effects on economic growth and welfare?

Author

Listed:
  • Pintu Parui

    (Indian Institute of Technology Bombay)

  • Klaus Prettner

    (Vienna University of Economics and Business)

Abstract

We propose a generalized R&D-based economic growth model that incorporates endogenous human capital accumulation in terms of education and health and the public provision of healthcare and basic science. The government taxes households to pay for healthcare personnel and basic researchers. These employees are not anymore available for applied research and for final goods production. Thus, important tradeoffs emerge for economic growth and welfare with respect to government spending policies. While increasing public spending on health and basic research may decrease economic growth and welfare in the short run, we show that they foster economic growth in the medium run and tend to raise long-run welfare when compared to actual levels of spending in Organisation for Economic Co-operation and Development (OECD) countries. In addition, since public funding for healthcare tends to be rather high in most rich countries, the overall public spending shortfall is lower than previous research has shown. Our results highlight the importance of understanding the tradeoffs involved when deciding adequate public funding for healthcare and basic research.

Suggested Citation

  • Pintu Parui & Klaus Prettner, 2025. "Public provision of healthcare and basic research: What are the joint effects on economic growth and welfare?," Journal of Economic Growth, Springer, vol. 30(3), pages 383-415, September.
    • Handle: RePEc:kap:jecgro:v:30:y:2025:i:3:d:10.1007_s10887-024-09250-2
    DOI: 10.1007/s10887-024-09250-2
    as

    Download full text from publisher

    File URL: http://link.springer.com/10.1007/s10887-024-09250-2
    File Function: Abstract
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1007/s10887-024-09250-2?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to

    for a different version of it.

    More about this item

    Keywords

    ;
    ;
    ;
    ;
    ;
    ;
    ;

    JEL classification:

    • H41 - Public Economics - - Publicly Provided Goods - - - Public Goods
    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
    • O32 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Management of Technological Innovation and R&D
    • O41 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - One, Two, and Multisector Growth Models

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:kap:jecgro:v:30:y:2025:i:3:d:10.1007_s10887-024-09250-2. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.