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Growth and Enduring Epidemic Diseases

This paper studies the formation of human capital and its transmission across generations when premature adult mortality is a salient feature of the demographic landscape, either permanently or in the form of a long-period wave that follows the outbreak of an epidemic. We establish several threshold properties of the model, for such a shock can severely retard economic growth, even to the point of leading to an economic collapse. Premature adult mortality may exacerbate inequality under nuclear family arrangements. Pooling mortality risks with equal treatment of all children may fend off, or even induce, a collapse, depending on the initial conditions and the size and duration of the shock. Awareness campaigns may also trigger a collapse by introducing undesirable expectational feedbacks.

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File URL: http://www.cer.ethz.ch/research/wp_06_57.pdf
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Paper provided by CER-ETH - Center of Economic Research (CER-ETH) at ETH Zurich in its series CER-ETH Economics working paper series with number 06/57.

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Length: 39 pages
Date of creation: May 2006
Date of revision:
Handle: RePEc:eth:wpswif:06-57
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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. Peter Lorentzen & John McMillan & Romain Wacziarg, 2006. "Death and Development," 2006 Meeting Papers 61, Society for Economic Dynamics.
  3. repec:cup:cbooks:9780521029018 is not listed on IDEAS
  4. 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.
  5. Alwyn Young, 2005. "The Gift of the Dying: The Tragedy of Aids and the Welfare of Future African Generations," The Quarterly Journal of Economics, MIT Press, vol. 120(2), pages 423-466, May.
  6. Raouf Boucekkine & Rodolphe Desbordes & Hélène Latzer, 2007. "How do epidemics induce behavioral changes?," Working Papers 2007_25, Business School - Economics, University of Glasgow.
  7. Anne Case & Christina Paxson & Joseph Ableidinger, 2002. "Orphans in Africa," NBER Working Papers 9213, National Bureau of Economic Research, Inc.
  8. Kathleen Beegle & Joachim Weerdt & Stefan Dercon, 2010. "Orphanhood and human capital destruction: Is there persistence into adulthood?," Demography, Springer, vol. 47(1), pages 163-180, February.
  9. Yamano, Takashi & Jayne, T S, 2005. "Working-Age Adult Mortality and Primary School Attendance in Rural Kenya," Economic Development and Cultural Change, University of Chicago Press, vol. 53(3), pages 619-53, April.
  10. David Evans & Edward Miguel, 2007. "Orphans and schooling in africa: a longitudinal analysis," Demography, Springer, vol. 44(1), pages 35-57, February.
  11. Clive Bell & Shantayanan Devarajan & Hans Gersbach, 2003. "The long-run economic costs of AIDS : theory and an application to South Africa," Policy Research Working Paper Series 3152, The World Bank.
  12. Robert J. Barro, 2012. "Inflation and Economic Growth," CEMA Working Papers 568, China Economics and Management Academy, Central University of Finance and Economics.
  13. Galor, Oded & Weil, David, 1999. "From Malthusian Stagnation to Modern Growth," CEPR Discussion Papers 2082, C.E.P.R. Discussion Papers.
  14. 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.
  15. Clive Bell & Shantayanan Devarajan & Hans Gersbach, 2006. "The Long-Run Economic Costs of aids: A Model with an Application to South Africa," World Bank Economic Review, World Bank Group, vol. 20(1), pages 55-89.
  16. Galor, Oded & Weil, David, 1998. "Population, Technology and Growth: From the Malthusian Regime to the Demographic Transition," CEPR Discussion Papers 1981, C.E.P.R. Discussion Papers.
  17. Amar Hamoudi & Nancy Birdsall, 2004. "AIDS and the Accumulation and Utilisation of Human Capital in Africa," Journal of African Economies, Centre for the Study of African Economies (CSAE), vol. 13(1), pages i96-i136, July.
  18. Raouf Boucekkine & Jean-Pierre Laffargue, 2009. "On the distributional consequences of epidemics," Working Papers 2009_22, Business School - Economics, University of Glasgow.
  19. Sebnem Kalemli-Ozcan, 2012. "AIDS, “reversal” of the demographic transition and economic development: evidence from Africa," Journal of Population Economics, Springer, vol. 25(3), pages 871-897, July.
  20. Bell, Clive & Gersbach, Hans, 2001. "Child Labor and the Education of a Society," IZA Discussion Papers 338, Institute for the Study of Labor (IZA).
  21. Johansson, Lars M., 2007. "Fiscal implications of AIDS in South Africa," European Economic Review, Elsevier, vol. 51(7), pages 1614-1640, October.
  22. repec:rus:hseeco:71105 is not listed on IDEAS
  23. David N. Weil & Oded Galor, 2000. "Population, Technology, and Growth: From Malthusian Stagnation to the Demographic Transition and Beyond," American Economic Review, American Economic Association, vol. 90(4), pages 806-828, September.
  24. Corrigan, Paul & Glomm, Gerhard & Mendez, Fabio, 2005. "AIDS crisis and growth," Journal of Development Economics, Elsevier, vol. 77(1), pages 107-124, June.
  25. Jeremy Magruder, 2011. "Marital Shopping and Epidemic AIDS," Demography, Springer, vol. 48(4), pages 1401-1428, November.
  26. Bruhns, Ramona, 2006. "The Long-run Effects of HIV/AIDS in Kenya," MPRA Paper 952, University Library of Munich, Germany.
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