Growth and welfare effects of health care in knowledge based economies

Arbeitspapier

We study the effects of a labor-intensive health care sector within an R&D-driven growth model with overlapping generations. Health care increases longevity and labor participation/productivity. We examine under which conditions expanding health care enhances growth and welfare. Even if the provision of health care diverts labor from productive activities, it may still fuel R&D and economic growth if the additional wealth that comes with expanding longevity translates into a more capital/machine- intensive final goods production and, thereby, raises the return to developing new machines. We establish mild conditions under which an expansion of health care beyond the growth-maximizing level is Pareto-improving.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: ECON WPS ; No. 03/2012

Classification and Topics

• Classification: Wirtschaft ; Health and Economic Development ; Health: Government Policy; Regulation; Public Health ; Macroeconomic Analyses of Economic Development ; One, Two, and Multisector Growth Models ; Institutions and Growth
• Subject: endogenous growth ; mortality ; (Blanchard) overlapping generations ; health care ; research and development ; sectoral composition

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Kuhn, Michael ; Prettner, Klaus
• Event: Veröffentlichung
• (who): Vienna University of Technology, Institute of Mathematical Methods in Economics, Research Group Economics
• (where): Vienna
• (when): 2012

Further information

• Handle: http://hdl.handle.net/10419/67609
• Last update: 10.03.2025, 11:43 AM CET