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Mortality, Human Capital and Persistent Inequality

  • Shankha Chakraborty
  • Mausumi Das

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 Econometric Society in its series Econometric Society 2004 North American Summer Meetings with number 100.

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Date of creation: 11 Aug 2004
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Handle: RePEc:ecm:nasm04:100
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