CHILDREN’S HEALTH, HUMAN CAPITAL ACCUMULATION, AND R&D-BASED ECONOMIC GROWTH

We analyze the effects of children’s health on human capital accumulation and on long-run economic growth. For this purpose, we design an R&D-based growth model in which the stock of human capital of the next generation is determined by parental education and health investments. We show that (i) there is a complementarity between education and health: if parents want to have better educated children, they also raise health investments and vice versa; (ii) parental health investments exert an unambiguously positive effect on long-run economic growth, (iii) faster population growth reduces long-run economic growth. These results are consistent with the empirical evidence for modern economies in the twentieth century.