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EFFECT OF PUBLIC HEALTH INVESTMENT ON ECONOMIC DEVELOPMENT VIA SAVINGS AND FERTILITY

Published online by Cambridge University Press:  14 June 2016

Hideki Nakamura  and
Yuko Mihara
Hideki Nakamura*
Affiliation:
Osaka City University
Yuko Mihara
Affiliation:
Okayama University of Science
*
Address correspondence to: Hideki Nakamura, Faculty of Economics, Osaka City University 3-3-138 Sugimoto, Sumiyoshi, Osaka 558-8585, Japan; e-mail: [email protected].
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Abstract

This study considers adult mortality and analyzes the effect of public health investment on economic development, whereby investment increases savings but decreases fertility through a decrease in adult mortality. As the labor force increases, investment temporarily decreases capital per unit of labor. However, the decrease in fertility increases capital per unit of labor in subsequent periods. By considering these two opposing effects of decreasing fertility, we clarify the conditions required for investment to improve economic development via increasing savings and decreasing fertility. We examine panel estimation and present some weak evidence for our model.

Keywords

Public Health InvestmentLife ExpectancySavingsFertilityPanel Estimation
Type
Articles
Information
Macroeconomic Dynamics , Volume 20 , Issue 5 , July 2016 , pp. 1341 - 1358
Copyright
Copyright © Cambridge University Press 2016 

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