Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/90482
Authors: 
Kuhn, Michael
Prettner, Klaus
Year of Publication: 
2012
Series/Report no.: 
Courant Research Centre: Poverty, Equity and Growth - Discussion Papers 120
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 fi nal 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

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