Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/67609
Authors: 
Kuhn, Michael
Prettner, Klaus
Year of Publication: 
2012
Series/Report no.: 
ECON WPS - Vienna University of Technology Working Papers in Economic Theory and Policy 03/2012
Abstract: 
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.
Subjects: 
endogenous growth
mortality
(Blanchard) overlapping generations
health care
research and development
sectoral composition
JEL: 
I15
I18
O11
O41
O43
Document Type: 
Working Paper

Files in This Item:
File
Size
879.46 kB





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.