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Economic growth, longevity and the epidemiological transition

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Abstract

This paper integrates investments in health to a standard growth model where physical and human capital investments are the combined engines of growth. It shows the existence of two distinct health regimes separated by an “epidemiological transition.’’ The various patterns of this transition identified in the epidemiological literature can be mapped into the model. The model also leads to the important hypothesis that the epidemiological transition may induce an economy to switch to a modern growth regime.

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Notes

  1. Life expectancy is included in the Human Development Index.

  2. One notable contribution is that of Van Zon and Muysken [22], who introduce a health sector in an endogenous growth model to examine the trade-off between health and human capital accumulation. Bloom and Canning [2] informally discuss the various mechanisms connecting growth and health.

  3. To simplify, it is assumed that all capital fully depreciates when used in the process of production.

  4. As discussed below, small here means that: \( k_{t} < {\left( {\ifmmode\expandafter\bar\else\expandafter\=\fi{k}/B} \right)}^{{1/\alpha }} \) where \( B = A{\left[ {{\left( {1 - \alpha } \right)}/{\left( {3 + 1/\alpha } \right)}} \right]} \)

  5. This paper ignores the positive contribution of a “good health’’ to labor productivity.

  6. Each generation thus starts with the same health capital, although the model can be amended to allow for some health spillover from one generation to the next.

  7. The findings of Fogel [6] support the hypothesis that the early decrease in mortality was closely associated with improved consumption and nutrition.

  8. Other researchers have also argued that a mortality decline can foster the transition to a modern growth regime, although other mechanisms were considered (see, for instance, Kalemli-Ozcan [13]).

  9. A poverty trap similar to that shown by Galor and Mayer-Foulkes (O. Galor and D. Mayer-Foulkes, unpublished paper on “Food for thought: basic needs and persistent educational inequality”, 2002).

  10. Four when counting the transitional variant of the delayed model.

  11. The assumption that health is the determining factor for longevity is consistent with empirical research.

  12. See also Meltzer for Mexico [16]; for sub-Saharan Africa, S. Chakraborty, unpublished paper on “Endogenous lifetime and economic growth”, circulated at University of Oregon, 2002.

  13. In Kalemli-Ozcan’s paper [13], parents make human capital investments in their children, but the mechanism is similar the one in this paper.

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  1. Department of Economics, University of Connecticut, Storrs, CT 06169, USA

    Olivier F. Morand

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  1. Olivier F. Morand
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Correspondence to Olivier F. Morand.

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Morand, O.F. Economic growth, longevity and the epidemiological transition. HEPAC 5, 166–174 (2004). https://doi.org/10.1007/s10198-003-0219-9

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