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Health, Development, and the Demographic Transition

  • Matteo Cervellati
  • Uwe Sunde



This paper provides a unified theory of the economic and demographic transition. The main mechanism is based on optimal decisions about fertility and time investments in heterogeneous types of human capital. These decisions depend on different dimensions of health, which themselves are endogenously determined in the process of development. By disentangling the distinct roles that different dimensions of health, such as adult longevity, child mortality, and overall healthiness, play for education and fertility decisions, the model is able to generate dynamics that can replicate the historical development pattern in the Western world. The model generates an endogenous economic transition from a situation of sluggish growth in incomes and productivity to a modern growth regime. Closely related, a demographic transition from high mortality and high fertility to low mortality and low fertility arises, with an intermediate phase of increasing fertility despite falling mortality rates. The model can generate a positive correlation between income and fertility during early stages of development, as well as a decline net fertility in the last phase of the demographic transition, and it provides a rationale for fertility declines that precede drops in child mortality

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Paper provided by Society for Economic Dynamics in its series 2006 Meeting Papers with number 645.

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Date of creation: 03 Dec 2006
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Handle: RePEc:red:sed006:645
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Society for Economic Dynamics Marina Azzimonti Department of Economics Stonybrook University 10 Nicolls Road Stonybrook NY 11790 USA

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  1. Oded Galor & Omer Moav, 2006. "Natural Selection and the Evolution of Life Expectancy," DEGIT Conference Papers c011_062, DEGIT, Dynamics, Economic Growth, and International Trade.
  2. Moshe Hazan & Binyamin Berdugo, 2005. "Child Labor, Fertility and Economic Growth," Development and Comp Systems 0507002, EconWPA.
  3. Acemoglu, D., 1997. "Why Do New Technologies Complement Skills? Directed Technical Change and Wage Inequality," Working papers 97-14, Massachusetts Institute of Technology (MIT), Department of Economics.
  4. Galor, Oded, 2005. "From Stagnation to Growth: Unified Growth Theory," Handbook of Economic Growth, in: Philippe Aghion & Steven Durlauf (ed.), Handbook of Economic Growth, edition 1, volume 1, chapter 4, pages 171-293 Elsevier.
  5. 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.
  6. Edward Miguel & Michael Kremer, 2004. "Worms: Identifying Impacts on Education and Health in the Presence of Treatment Externalities," Econometrica, Econometric Society, vol. 72(1), pages 159-217, 01.
  7. James P. Smith, 1999. "Healthy Bodies and Thick Wallets: The Dual Relation between Health and Economic Status," Journal of Economic Perspectives, American Economic Association, vol. 13(2), pages 145-166, Spring.
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