Growth and welfare effects of health care in knowledge-based economies

Michael Kuhn; Klaus Prettner

doi:10.1016/j.jhealeco.2016.01.009

Growth and welfare effects of health care in knowledge-based economies

J Health Econ. 2016 Mar:46:100-19. doi: 10.1016/j.jhealeco.2016.01.009. Epub 2016 Feb 4.

Authors

Michael Kuhn¹, Klaus Prettner²

Affiliations

¹ Wittgenstein Centre (IIASA, VID/ÖAW, WU), Vienna Institute of Demography, Welthandelsplatz 2, Level 2, A-1020 Vienna, Austria. Electronic address: michael.kuhn@oeaw.ac.at.
² University of Hohenheim, Institute of Economics, Schloss, Osthof-West, 70593 Stuttgart, Germany. Electronic address: klaus.prettner@uni-hohenheim.de.

PMID: 26918295
DOI: 10.1016/j.jhealeco.2016.01.009

Abstract

We study the effects of labor intensive health care within a research and development (R&D) driven growth model with overlapping generations. Health care increases longevity, labor participation, and productivity, while it also diverts labor away from production and R&D. We examine under which conditions expanding health care enhances growth and welfare and establish mild conditions under which the provision of health care beyond the growth-maximizing level is Pareto superior.

Keywords: Endogenous growth; Health care; Morbidity; Mortality; Research and development.

Publication types

Research Support, Non-U.S. Gov't

MeSH terms

Delivery of Health Care*
Developed Countries*
Economic Development*
Employment
Humans
Longevity*
Models, Statistical
Morbidity
Mortality