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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. Raouf Boucekkine & Rodolphe Desbordes & Hélène Latzer, 2007. "How do epidemics induce behavioral changes?," Working Papers 2007_25, Business School - Economics, University of Glasgow.
  2. Peter Lorentzen & John McMillan & Romain Wacziarg, 2006. "Death and Development," 2006 Meeting Papers 61, Society for Economic Dynamics.
  3. Corrigan, Paul & Glomm, Gerhard & Mendez, Fabio, 2005. "AIDS crisis and growth," Journal of Development Economics, Elsevier, vol. 77(1), pages 107-124, June.
  4. BOUCEKKINE, Raouf & LAFFARGE, Jean-Pierre, . "On the distributional consequences of epidemics," CORE Discussion Papers RP -2204, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
  5. David Evans & Edward Miguel, 2007. "Orphans and schooling in africa: a longitudinal analysis," Demography, Springer, vol. 44(1), pages 35-57, February.
  6. 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.
  7. Galor, Oded & Weil, David, 1999. "From Malthusian Stagnation to Modern Growth," CEPR Discussion Papers 2082, C.E.P.R. Discussion Papers.
  8. Bell, Clive & Gersbach, Hans, 2009. "Child Labor And The Education Of A Society," Macroeconomic Dynamics, Cambridge University Press, vol. 13(02), pages 220-249, April.
  9. Robert J. Barro, 1995. "Inflation and Economic Growth," NBER Working Papers 5326, National Bureau of Economic Research, Inc.
  10. Sebnem Kalemli-Ozcan, 2006. "AIDS, "Reversal" of the Demographic Transition and Economic Development: Evidence from Africa," NBER Working Papers 12181, National Bureau of Economic Research, Inc.
  11. Jeremy Magruder, 2011. "Marital Shopping and Epidemic AIDS," Demography, Springer, vol. 48(4), pages 1401-1428, November.
  12. 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.
  13. Johansson, Lars M., 2007. "Fiscal implications of AIDS in South Africa," European Economic Review, Elsevier, vol. 51(7), pages 1614-1640, October.
  14. 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.
  15. Chakraborty, Shankha, 2004. "Endogenous lifetime and economic growth," Journal of Economic Theory, Elsevier, vol. 116(1), pages 119-137, May.
  16. repec:cup:cbooks:9780521029018 is not listed on IDEAS
  17. 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.
  18. Anne Case & Christina Paxson & Joseph Ableidinger, 2002. "Orphans in Africa," NBER Working Papers 9213, National Bureau of Economic Research, Inc.
  19. repec:rus:hseeco:71105 is not listed on IDEAS
  20. 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.
  21. 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.
  22. 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.
  23. 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.
  24. 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.
  25. Bruhns, Ramona, 2006. "The Long-run Effects of HIV/AIDS in Kenya," MPRA Paper 952, University Library of Munich, Germany.
  26. 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.
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