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Mortality, Human Capital and Persistent Inequality

  • Shankha Chakraborty

    (University of Oregon)

  • Mausumi Das

    (Delhi School of Economics)

Available evidence suggests high intergenerational correlation of economic status,and persistent disparities in health status between the rich and the poor. This paper proposes a novel mechanism linking the two. We introduce health human capital into a two-period overlapping generations model. Private health investment improves the probability of surviving from the first period of life to the next and, along with education, enhances an individual's labor productivity. Poorer parents are of poor health, unable to invest much in reducing mortality risk and improving their human capital. Consequently, they leave less for their progeny. Despite convex preferences, technology and complete markets, initial differences in economic and health status may perpetuate across generations.

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Paper provided by Centre for Development Economics, Delhi School of Economics in its series Working papers with number 119.

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Length: 33 pages
Date of creation: Apr 2003
Date of revision:
Handle: RePEc:cde:cdewps:119
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