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A theory of medicine effectiveness, differential mortality, income inequality and growth for pre-industrial England

  • DE LA CROIX, David
  • SOMMACAL, Alessandro

We study how mortality reductins and income growth interact, looking at their relationship prior to the Industrial Revolution, when income per capita was stagnant. We first present a model of individual medical spending giving a rationale for individual health expenditures even when medicine was not effective in postponing death. We then explain the rise of effective medicine by a learning process function of expenditures in health. The rise in effective medicine can then be linked to the take-off of the eighteenth century through life expectancy increases, and fostered capital accumulation. The rise of effective medicine has also an impact on the relation between growth and inequality and on the intergenerational persistence of differences in income. These channels are operative through differential mortality induced by medicine effectiveness that turns out to determines a differential in the propensity to save among income groups.

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Paper provided by Université catholique de Louvain, Center for Operations Research and Econometrics (CORE) in its series CORE Discussion Papers with number 2006045.

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Date of creation: 00 May 2006
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Handle: RePEc:cor:louvco:2006045
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  1. Nicolini, Esteban A., 2004. "Mortality, interest rates, investment, and agricultural production in 18th century England," Explorations in Economic History, Elsevier, vol. 41(2), pages 130-155, April.
  2. Lindert, Peter H., 2000. "Three centuries of inequality in Britain and America," Handbook of Income Distribution, in: A.B. Atkinson & F. Bourguignon (ed.), Handbook of Income Distribution, edition 1, volume 1, chapter 3, pages 167-216 Elsevier.
  3. Shankha Chakraborty & Mausumi Das, 2003. "Mortality, Human Capital and Persistent Inequality," Working papers 119, Centre for Development Economics, Delhi School of Economics.
  4. Oded Galor & Omer Moav, 2004. "From Physical to Human Capital Accumulation: Inequality and the Process of Development," GE, Growth, Math methods 0410005, EconWPA.
  5. de la Croix, David & Licandro, Omar, 1997. "Life expectancy and endogenous growth," Discussion Papers (IRES - Institut de Recherches Economiques et Sociales) 1997029, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES).
  6. BOUCEKKINE, Raouf & de la CROIX, David & LICANDRO, Omar, 2002. "Early mortality declines at the dawn of modern growth," CORE Discussion Papers 2002030, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
  7. Acemoglu, Daron & Robinson, James A, 2002. "The Political Economy of the Kuznets Curve," Review of Development Economics, Wiley Blackwell, vol. 6(2), pages 183-203, June.
  8. Olivier Morand, 2004. "Economic growth, longevity and the epidemiological transition," The European Journal of Health Economics, Springer, vol. 5(2), pages 166-174, May.
  9. Galor, Oded & Weil, David, 1999. "From Malthusian Stagnation to Modern Growth," CEPR Discussion Papers 2082, C.E.P.R. Discussion Papers.
  10. Shankha Chakraborty, 2002. "Endogenous Lifetime and Economic Growth," University of Oregon Economics Department Working Papers 2002-03, University of Oregon Economics Department, revised 26 Jan 2002.
  11. Edlin, Aaron S. & Shannon, Chris, 1998. "Strict Monotonicity in Comparative Statics," Journal of Economic Theory, Elsevier, vol. 81(1), pages 201-219, July.
  12. Zhang, Junsen & Zhang, Jie & Lee, Ronald, 2001. "Mortality decline and long-run economic growth," Journal of Public Economics, Elsevier, vol. 80(3), pages 485-507, June.
  13. Fogel, Robert W, 1994. "Economic Growth, Population Theory, and Physiology: The Bearing of Long-Term Processes on the Making of Economic Policy," American Economic Review, American Economic Association, vol. 84(3), pages 369-95, June.
  14. Amparo Castello-Climent & Rafael Domenech, 2006. "Human Capital Inequality, Life Expectancy and Economic Growth," Working Papers 0604, International Economics Institute, University of Valencia.
  15. Nils-Petter Lagerlöf, 2003. "From Malthus to Modern Growth: Can Epidemics Explain the Three Regimes?," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 44(2), pages 755-777, 05.
  16. Kalemli-Ozcan, Sebnem, 2002. " Does the Mortality Decline Promote Economic Growth?," Journal of Economic Growth, Springer, vol. 7(4), pages 411-39, December.
  17. repec:cai:popine:popu_p1977_32n1_0352 is not listed on IDEAS
  18. 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.
  19. Matteo Cervellati & Uwe Sunde, 2005. "Human Capital Formation, Life Expectancy, and the Process of Development," American Economic Review, American Economic Association, vol. 95(5), pages 1653-1672, December.
  20. repec:rus:hseeco:71105 is not listed on IDEAS
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