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Health and education investments in human capital, the impacts on fertility and economic growth

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  • Zhehao Wang

    (Osaka School of International Public Policy, Osaka University)

Abstract

In this paper, we explore the impacts of government policies on endogenous fertility and economic growth in a full-fledged framework with private and public spending on both health and education. First, we show that excessive government expenditure on education and insufficient government expenditure on health may lead to zero or even negative economic growth. Second, in our specified model, the income tax rate is shown to have no impact on fertility. Third, we determine the income tax rate and the fraction of revenue used for education expenditure to maximize the balanced growth rate. Furthermore, it is demonstrated that larger public health expenditure on children leads to greater economic growth. Moreover, the welfare-maximizing tax rate and shares of public expenditure allocated to children’s health and education are found to be smaller than the growth-maximizing counterparts. Finally, the welfare-maximizing tax rate exhibits a non-monotonic relationship with social discount factor.

Suggested Citation

  • Zhehao Wang, 2025. "Health and education investments in human capital, the impacts on fertility and economic growth," Discussion Papers in Economics and Business 25-14, Osaka University, Graduate School of Economics.
    • Handle: RePEc:osk:wpaper:2514
    as

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    References listed on IDEAS

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    Keywords

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    JEL classification:

    • I10 - Health, Education, and Welfare - - Health - - - General
    • I20 - Health, Education, and Welfare - - Education - - - General
    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General

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