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Mortality, Human Capital and Persistent Inequality

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Abstract

Available evidence suggests high intergenerational correlation of economic status and persistent disparities in health status between the rich and the poor. This paper proposes a mechanism linking the two. We introduce health capital into a two-period overlapping generations model. Private health investment improves the probability of surviving from the first period of life to the next and, along with education, enhances an individual’s labor productivity. Poorer parents are of poor health, unable to invest much in reducing mortality risk and improving their human capital. Consequently, they leave less for their progeny. Despite convex preferences and technologies, initial differences in economic and health status may perpetuate across generations when annuities markets are imperfect.

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Authors and Affiliations

  1. Department of Economics, University of Oregon, Eugene, OR, 97403-1285, USA

    Shankha Chakraborty

  2. Department of Economics, Delhi School of Economics, University of Delhi, Delhi, 110007, India

    Mausumi Das

Authors
  1. Shankha Chakraborty
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  2. Mausumi Das
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Correspondence to Shankha Chakraborty.

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Additional support was provided by the National Science Foundation. Additional support was provided by the National Science Foundation.

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Chakraborty, S., Das, M. Mortality, Human Capital and Persistent Inequality. J Econ Growth 10, 159–192 (2005). https://doi.org/10.1007/s10887-005-1670-5

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  • DOI: https://doi.org/10.1007/s10887-005-1670-5

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