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Income variation, endogenous population growth and health subsidy

Author

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  • Manuel A.Gómez
  • Luis C.Currais

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Abstract

This paper presents a fertility choice model in which the mortality rate is also endogenously determined and health expenditure provides utility to individuals as well as affects the mortality rate. The analysis shows that the model predictions agree with the empirical evidence on the relationship between demography trends and economic development. Public expenditure represents a large amount of total expenditure on health care in many countries. Thus, we also study the effects that introducing a subsidy to health expenditure has on economic and demographic variables. These effects are found to depend on the way the subsidy is financed.

Suggested Citation

  • Manuel A.Gómez & Luis C.Currais, 2001. "Income variation, endogenous population growth and health subsidy," Estudios de Economia, University of Chile, Department of Economics, vol. 28(2 Year 20), pages 165-181, December.
  • Handle: RePEc:udc:esteco:v:28:y:2001:i:2:p:165-181
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    File URL: http://www.econ.uchile.cl/uploads/publicacion/09a87da9-e4ec-4b7a-8fa9-02352c23d99d.pdf
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    References listed on IDEAS

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    1. Stokey, Nancy L & Rebelo, Sergio, 1995. "Growth Effects of Flat-Rate Taxes," Journal of Political Economy, University of Chicago Press, vol. 103(3), pages 519-550, June.
    2. Michael Grossman, 1972. "The Demand for Health: A Theoretical and Empirical Investigation," NBER Books, National Bureau of Economic Research, Inc, number gros72-1, June.
    3. Barro, Robert J & Becker, Gary S, 1989. "Fertility Choice in a Model of Economic Growth," Econometrica, Econometric Society, vol. 57(2), pages 481-501, March.
    4. Parkin, David & McGuire, Alistair & Yule, Brian, 1987. "Aggregate health care expenditures and national income : Is health care a luxury good?," Journal of Health Economics, Elsevier, vol. 6(2), pages 109-127, June.
    5. Casey B. Mulligan & Xavier Sala-i-Martin, 1993. "Transitional Dynamics in Two-Sector Models of Endogenous Growth," The Quarterly Journal of Economics, Oxford University Press, vol. 108(3), pages 739-773.
    6. Gary S. Becker & Robert J. Barro, 1988. "A Reformulation of the Economic Theory of Fertility," The Quarterly Journal of Economics, Oxford University Press, vol. 103(1), pages 1-25.
    7. Keith Blackburn & Giam Pietro Cipriani, 1998. "Endogenous fertility, mortality and growth," Journal of Population Economics, Springer;European Society for Population Economics, vol. 11(4), pages 517-534.
    8. Ehrlich, Isaac & Lui, Francis, 1997. "The problem of population and growth: A review of the literature from Malthus to contemporary models of endogenous population and endogenous growth," Journal of Economic Dynamics and Control, Elsevier, vol. 21(1), pages 205-242, January.
    9. Lucas, Robert E, Jr, 1990. "Supply-Side Economics: An Analytical Review," Oxford Economic Papers, Oxford University Press, vol. 42(2), pages 293-316, April.
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    Cited by:

    1. Evangelos V. Dioikitopoulos, 2014. "Aging, growth and the allocation of public expenditures on health and education," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 47(4), pages 1173-1194, November.

    More about this item

    Keywords

    Fertility; Mortality; Growth; Health Expenditure.;

    JEL classification:

    • J13 - Labor and Demographic Economics - - Demographic Economics - - - Fertility; Family Planning; Child Care; Children; Youth
    • I12 - Health, Education, and Welfare - - Health - - - Health Behavior
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence
    • H51 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Health

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