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The Effects of Health Investments on Human Capital and R&D-Driven Economic Growth

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  • Annarita BALDANZI
  • Alberto BUCCI
  • Klaus PRETTNER

Abstract

We propose an R&D-based growth model in which the stock of human capital of the next generation is determined by parental education and health investments. We show that there is a complementarity between education and health: if parents want to have better educated children, they also need to increase health investments and vice versa. We also show that population growth has a negative effect on long-run economic growth, which is consistent with the empirical evidence for modern economies in the twentieth century. Altogether, our framework provides a complementary mechanism to explain the finding that health investments reduce fertility and raise economic growth.

Suggested Citation

  • 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.
  • Handle: RePEc:mil:wpdepa:2016-17
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    More about this item

    Keywords

    Health; Education; Fertility; Economic Growth;
    All these keywords.

    JEL classification:

    • I15 - Health, Education, and Welfare - - Health - - - Health and Economic Development
    • I25 - Health, Education, and Welfare - - Education - - - Education and Economic Development
    • J10 - Labor and Demographic Economics - - Demographic Economics - - - General
    • O30 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - General
    • O41 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - One, Two, and Multisector Growth Models

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