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A model of longevity, human capital and growth

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  • Oscar Iván AVILA MONTEALEGRE

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Abstract

Long run economic growth and its transitional dynamics are determined in ageneral equilibrium model of endogenous longevity, human capital and growth.Agents in overlapping generations survive safely for the first two periods of life andface an endogenous probability of surviving for a third period. Given thisprobability, each agent maximizes her expected lifetime utility choosingconsumption, and the quantity of resources destined to her child´s education andhealth. Human capital accumulation depends on education and health expendituresand on parent´s human capital. The model produces two kinds of equilibriums, onewith high life expectancy, human capital and GDP, and the other with low high lifeexpectancy, human capital and GDP. These predictions accord with the empiricalevidence on demographic transitions and development.

Suggested Citation

  • Oscar Iván AVILA MONTEALEGRE, 2010. "A model of longevity, human capital and growth," ARCHIVOS DE ECONOMÍA 008851, DEPARTAMENTO NACIONAL DE PLANEACIÓN.
  • Handle: RePEc:col:000118:008851
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    File URL: https://colaboracion.dnp.gov.co/CDT/Estudios%20Econmicos/369.pdf
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    References listed on IDEAS

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    1. Chakraborty, Shankha, 2004. "Endogenous lifetime and economic growth," Journal of Economic Theory, Elsevier, vol. 116(1), pages 119-137, May.
    2. Mincer, Jacob, 1970. "The Distribution of Labor Incomes: A Survey with Special Reference to the Human Capital Approach," Journal of Economic Literature, American Economic Association, vol. 8(1), pages 1-26, March.
    3. Li, Hongbin & Zhang, Jie & Zhang, Junsen, 2007. "Effects of longevity and dependency rates on saving and growth: Evidence from a panel of cross countries," Journal of Development Economics, Elsevier, vol. 84(1), pages 138-154, September.
    4. McDonald, Scott & Roberts, Jennifer, 2002. "Growth and multiple forms of human capital in an augmented Solow model: a panel data investigation," Economics Letters, Elsevier, vol. 74(2), pages 271-276, January.
    5. N. Gregory Mankiw & David Romer & David N. Weil, 1992. "A Contribution to the Empirics of Economic Growth," The Quarterly Journal of Economics, Oxford University Press, vol. 107(2), pages 407-437.
    6. Glomm, Gerhard & Ravikumar, B, 1992. "Public versus Private Investment in Human Capital Endogenous Growth and Income Inequality," Journal of Political Economy, University of Chicago Press, vol. 100(4), pages 818-834, August.
    7. Knowles, Stephen & Owen, P. Dorian, 1995. "Health capital and cross-country variation in income per capita in the Mankiw-Romer-Weil model," Economics Letters, Elsevier, vol. 48(1), pages 99-106, April.
    8. David E. Bloom & David Canning & Jaypee Sevilla, 2001. "The Effect of Health on Economic Growth: Theory and Evidence," NBER Working Papers 8587, National Bureau of Economic Research, Inc.
    9. Blackburn, Keith & Cipriani, Giam Pietro, 2002. "A model of longevity, fertility and growth," Journal of Economic Dynamics and Control, Elsevier, vol. 26(2), pages 187-204, February.
    10. Tabata, Ken, 2005. "Population aging, the costs of health care for the elderly and growth," Journal of Macroeconomics, Elsevier, vol. 27(3), pages 472-493, September.
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    More about this item

    Keywords

    Longevity; human capital; demographic transition; economicgrowth.;

    JEL classification:

    • J10 - Labor and Demographic Economics - - Demographic Economics - - - General
    • J14 - Labor and Demographic Economics - - Demographic Economics - - - Economics of the Elderly; Economics of the Handicapped; Non-Labor Market Discrimination
    • O10 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - General
    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration

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