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Endogenous mortality, human capital and economic growth

Osang, Thomas & Sarkar, Jayanta (2008) Endogenous mortality, human capital and economic growth. Journal of Macroeconomics, 30(4), pp. 1423-1445.

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Abstract

We consider growth and welfare effects of lifetime-uncertainty in an economy with human capital-led endogenous growth. We argue that lifetime uncertainty reduces private incentives to invest in both physical and human capital. Using an overlapping generations framework with finite-lived households we analyze the relevance of government expenditure on health and education to counter such growth-reducing forces. We focus on three different models that differ with respect to the mode of financing of education: (i) both private and public spending, (ii) only public spending, and (iii) only private spending. Results show that models (i) and (iii) outperform model (ii) with respect to long-term growth rates of per capita income, welfare levels and other important macroeconomic indicators. Theoretical predictions of model rankings for these macroeconomic indicators are also supported by observed stylized facts.

Impact and interest:

9 citations in Scopus
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6 citations in Web of Science®

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ID Code: 44288
Item Type: Journal Article
Keywords: Health, Life expectancy, Human capital, Public spending, Endogenous growth
DOI: 10.1016/j.jmacro.2007.09.002
ISSN: 0164-0704
Subjects: Australian and New Zealand Standard Research Classification > ECONOMICS (140000) > Economic Theory (140100)
Divisions: Current > QUT Faculties and Divisions > QUT Business School
Current > Schools > School of Economics & Finance
Copyright Owner: Copyright 2007 Elsevier Inc.
Deposited On: 25 Aug 2011 08:10
Last Modified: 01 Mar 2012 00:23

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