Davide Dottori
Endogenous Lifespan, Private vs Public Health Funding, and Economic Growth

Abstract: An overlapping generations model is set up to compare in terms of economic, growth rates and income distribution two regimes of health funding:, private and, public ones. Health is not only a component of human capital but it also, yields, directly utility and - by enlarging lifespan - it reduces future, discounting thus, affecting the propensity to invest in human capital accumulation. In the, private, system health expenditure is chosen in a decentralized way, whereas in the, public, regime it is provided by government and funded through an income tax, which, is determined by voting. Endogenous poverty traps are shown to may arise., Inequality, turns out to decline faster in the public regime, whereas in the private, one it may be non-decreasing. The private system generally results to, bring about, higher growth rates, but when income distribution is enough uneven the public, system may feature higher growth rates.

JEL: H51, I1, O1.
Keywords: Health, Lifespan, Economic Growth, Inequality, Public and Private Health Expenditure, Low-Development Traps.



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