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Human Capital Inequality, Life Expectancy and Economic Growth

Author

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  • Climent, Amparo Castello

    (Universidad Jaume 1 & UCL)

  • Rafael Domenech

Abstract

This paper provides a theoretical model in which inequality affects per capita income when individuals decide to accumulate human capital depending on their life expectancy. The model assumes that life expectancy depends to a large extent on the environment in which individuals grow up, in particular, on the human capital of their parents. After calibrating the life expectancy function according to the international evidence for cross-section data, our results show the existence of multiple steady states depending on the initial distribution of education. In particular, human capital may converge towards different stable steady states. In accordance with the evidence displayed by many developing countries, the low steady state is a poverty trap in which children are raised in poor families, have a low life expectancy and work as non-educated workers all their lives.

Suggested Citation

  • Climent, Amparo Castello & Rafael Domenech, 2003. "Human Capital Inequality, Life Expectancy and Economic Growth," Royal Economic Society Annual Conference 2003 46, Royal Economic Society.
  • Handle: RePEc:ecj:ac2003:46
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    References listed on IDEAS

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    Cited by:

    1. Amparo Castelló-Climent, 2010. "Channels through Which Human Capital Inequality Influences Economic Growth," Journal of Human Capital, University of Chicago Press, pages 394-450.
    2. Tetsuo Ono, 2015. "Public education and social security: a political economy approach," Economics of Governance, Springer, vol. 16(1), pages 1-25, February.
    3. David Croix & Alessandro Sommacal, 2009. "A Theory of Medical Effectiveness, Differential Mortality, Income Inequality and Growth for Pre-Industrial England," Mathematical Population Studies, Taylor & Francis Journals, vol. 16(1), pages 2-35.
    4. Castelló-Climent, Amparo & Hidalgo-Cabrillana, Ana, 2012. "The role of educational quality and quantity in the process of economic development," Economics of Education Review, Elsevier, vol. 31(4), pages 391-409.
    5. Rangan Gupta & Cobus Vermeulen, 2010. "Private and Public Health Expenditures in an Endogenous Growth Model with Inflation Targeting," Annals of Economics and Finance, Society for AEF, vol. 11(1), pages 139-153, May.
    6. Karine Constant & Natacha Raffin, 2016. "Environnement, croissance et inégalités : le rôle particulier du canal de la santé," Revue française d'économie, Presses de Sciences-Po, vol. 0(3), pages 9-29.
    7. DE LA CROIX, David & SOMMACAL, Alessandro, 2006. "A theory of medicine effectiveness, differential mortality, income inequality and growth for pre-industrial England," CORE Discussion Papers 2006045, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
    8. Karine Constant, 2015. "Environmental Policy and Inequality: A Matter of Life and Death," Working Papers halshs-01174052, HAL.
    9. Papageorgiou, Chris & Razak, Nor Azam Abdul, 2009. "Inequality, Human Capital and Development: Making the Theory Face the Facts," MPRA Paper 18973, University Library of Munich, Germany.
    10. Annarita BALDANZI & Alberto BUCCI & Klaus PRETTNER, 2016. "The Effects of Health Investments on Human Capital and R&D-Driven Economic Growth," Departmental Working Papers 2016-17, Department of Economics, Management and Quantitative Methods at Università degli Studi di Milano.
    11. Omer Moav, 2005. "Cheap Children and the Persistence of Poverty," Economic Journal, Royal Economic Society, vol. 115(500), pages 88-110, January.
    12. repec:rss:jnljse:v3i4p2 is not listed on IDEAS
    13. Jesus Crespo Cuaresma & Samir K.C. & Petra Sauer, 2013. "Age-Specific Education Inequality, Education Mobility and Income Growth," WWWforEurope Working Papers series 6, WWWforEurope.
    14. Ünal Töngür & Adem Yavuz Elveren, 2016. "The impact of military spending and income inequality on economic growth in Turkey," Defence and Peace Economics, Taylor & Francis Journals, vol. 27(3), pages 433-452, June.
    15. Srikanth Ramamurthy & Norman Sedgley, 2015. "Human Capital Choice and the Wage Gap: The Role of Worklife Expectancy and Statistical Discrimination," Journal of Labor Research, Springer, vol. 36(2), pages 175-187, June.
    16. Yin-Chi Wang, 2011. "Health, Education and Development," 2011 Meeting Papers 1263, Society for Economic Dynamics.
    17. Amparo Castelló-Climent, 2011. "Channels Through Which Human Capital Inequality Influences Economic Growth," Working Papers 1101, International Economics Institute, University of Valencia.
    18. Jeroen Klomp & Jakob Haan, 2013. "Political Regime and Human Capital: A Cross-Country Analysis," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 111(1), pages 45-73, March.
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    More about this item

    Keywords

    life expectancy; iinequality; human capital accumulation;

    JEL classification:

    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General

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