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Human Capital Formation, Life Expectancy and the Process of Economic Development

Author

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  • Cervellati, Matteo

    (University of Bologna)

  • Sunde, Uwe

    (University of Munich)

Abstract

This paper provides a unified theory of the transition in income, life expectancy, education and population, experienced by the Western world when passing from an environment of economic stagnation to sustained growth. The transition is based on the interplay between human capital formation, technological progress, and life expectancy. A positive feedback between human capital accumulation and longevity is eventually triggered when endogenous skill-biased technological progress provides sufficiently high returns to human capital for large fractions of the population to outweigh the costs in terms of lifetime spent on education.

Suggested Citation

  • Cervellati, Matteo & Sunde, Uwe, 2002. "Human Capital Formation, Life Expectancy and the Process of Economic Development," IZA Discussion Papers 585, Institute of Labor Economics (IZA).
  • Handle: RePEc:iza:izadps:dp585
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    References listed on IDEAS

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    Cited by:

    1. Sheshinski, Eytan, 2009. "Uncertain Longevity and Investment in Education," MPRA Paper 53144, University Library of Munich, Germany.
    2. Michele Boldrin & Larry E. Jones & Aubhik Khan, 2005. "Three Equations Generating an Industrial Revolution?," Levine's Bibliography 784828000000000385, UCLA Department of Economics.
    3. Hazan, Moshe & Zoabi, Hosny, 2005. "Does Longevity Cause Growth?," CEPR Discussion Papers 4931, C.E.P.R. Discussion Papers.
    4. Ruba Abdullah Aljarallah, 2020. "The Economic Impacts of Natural Resource Dependency in Gulf Countries," International Journal of Energy Economics and Policy, Econjournals, vol. 10(6), pages 36-52.
    5. Francesco Lancia & Giovanni Prarolo, 2012. "A politico-economic model of aging, technology adoption and growth," Journal of Population Economics, Springer;European Society for Population Economics, vol. 25(3), pages 989-1018, July.
    6. Luis Angeles, 2010. "Demographic transitions: analyzing the effects of mortality on fertility," Journal of Population Economics, Springer;European Society for Population Economics, vol. 23(1), pages 99-120, January.
    7. Oded Galor & Omer Moav, 2004. "Natural Selection and the Evolution of Life Expectancy," GE, Growth, Math methods 0409004, University Library of Munich, Germany.
    8. Moshe Hazan, 2009. "Longevity and Lifetime Labor Supply: Evidence and Implications," Econometrica, Econometric Society, vol. 77(6), pages 1829-1863, November.
    9. Leroux, M.-L. & Pestieau, P. & Ponthiere, G., 2011. "Longevity, genes and efforts: An optimal taxation approach to prevention," Journal of Health Economics, Elsevier, vol. 30(1), pages 62-76, January.
    10. Strulik, Holger, 2008. "Geography, health, and the pace of demo-economic development," Journal of Development Economics, Elsevier, vol. 86(1), pages 61-75, April.
    11. Daniel Aaronson & Fabian Lange & Bhashkar Mazumder, 2014. "Fertility Transitions along the Extensive and Intensive Margins," American Economic Review, American Economic Association, vol. 104(11), pages 3701-3724, November.
    12. Moshe Hazan, 2006. "Longevity and Lifetime Labor Input: Data and Implications," DEGIT Conference Papers c011_065, DEGIT, Dynamics, Economic Growth, and International Trade.
    13. Michael Bar & Oksana Leukhina, 2010. "The role of mortality in the transmission of knowledge," Journal of Economic Growth, Springer, vol. 15(4), pages 291-321, December.
    14. Tamura, Robert, 2006. "Human capital and economic development," Journal of Development Economics, Elsevier, vol. 79(1), pages 26-72, February.
    15. Mokyr, Joel, 2005. "Long-Term Economic Growth and the History of Technology," Handbook of Economic Growth, in: Philippe Aghion & Steven Durlauf (ed.), Handbook of Economic Growth, edition 1, volume 1, chapter 17, pages 1113-1180, Elsevier.
    16. Pierre-Richard Agénor, 2015. "Public capital, health persistence and poverty traps," Journal of Economics, Springer, vol. 115(2), pages 103-131, June.
    17. Matthias Doepke, 2008. "Humankapital, politischer Wandel und langfristige Wirtschaftsentwicklung," Perspektiven der Wirtschaftspolitik, Verein für Socialpolitik, vol. 9(s1), pages 73-89, May.
    18. Joel Mokyr & Hans-Joachim Voth, 2012. "Understanding Growth in Europe, 1700–1870: Theory and Evidence," Journal of Economic Sociology, National Research University Higher School of Economics, vol. 13(5), pages 57-102.
    19. Strulik, Holger, 2008. "Degrees of Development - How Geographic Latitude Sets the Pace of Industrialization and Demographic Change," Hannover Economic Papers (HEP) dp-384, Leibniz Universität Hannover, Wirtschaftswissenschaftliche Fakultät.
    20. David Mayer-Foulkes, 2008. "Economic Geography of Human Development: Stratified Growth in Bolivia, Brazil, Guatemala and Peru," Working papers DTE 436, CIDE, División de Economía.
    21. Moshe Hazan & Hosny Zoabi, 2006. "Does longevity cause growth? A theoretical critique," Journal of Economic Growth, Springer, vol. 11(4), pages 363-376, December.
    22. David Mayer Foulkes, 2005. "Institutions and Long-Term Development Policy," Working papers DTE 328, CIDE, División de Economía.
    23. Kyriakos C. Neanidis, 2012. "Humanitarian Aid, Fertility and Economic Growth," Economica, London School of Economics and Political Science, vol. 79(313), pages 27-61, January.
    24. Holger Strulik, 2005. "Geography, Health, and Demo-Economic Development," Discussion Papers 05-15, University of Copenhagen. Department of Economics.
    25. David Mayer Foulkes., 2007. "Subdesarrollo y globalización," Ensayos Revista de Economia, Universidad Autonoma de Nuevo Leon, Facultad de Economia, vol. 0(1), pages 155-192, May.

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    More about this item

    Keywords

    long-term development; endogenous life expectancy; technological progress; industrial revolution; heterogeneous human capital;
    All these keywords.

    JEL classification:

    • E10 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - General
    • J10 - Labor and Demographic Economics - - Demographic Economics - - - General
    • O10 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - General
    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General
    • O41 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - One, Two, and Multisector Growth Models

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