Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/25774 
Year of Publication: 
2006
Series/Report no.: 
CESifo Working Paper No. 1729
Publisher: 
Center for Economic Studies and ifo Institute (CESifo), Munich
Abstract: 
This paper studies the formation of human capital and its transmission across generations when premature adult mortality is a salient feature of the demographic landscape, either permanently or in the form of a long-period wave that follows the outbreak of an epidemic. We establish several threshold properties of the model, for such a shock can severely retard economic growth, even to the point of leading to an economic collapse. Premature adult mortality may exacerbate inequality under nuclear family arrangements. Pooling mortality risks with equal treatment of all children may fend off, or even induce, a collapse, depending on the initial conditions and the size and duration of the shock. Awareness campaigns may also trigger a collapse by introducing undesirable expectational feedbacks.
JEL: 
I10
I20
O11
O40
Document Type: 
Working Paper
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