Population Aging and Economic Growth: the effect of health expenditure

Rising longevity has led to population aging in developed countries, causing increasing concerns about its economic impact. Specially, the trend of population aging increases health expenditure in developed countries, and 70% to 80% of health expenditure is funded by public sector. Therefore, this paper focuses on the health demand in an aging economy and examines how the aging of the population and public health funding (PHF) affects agents' behavior. For this purpose, we construct a simple growth model and examine the e®ect of aging and PHF on saving and the growth rate. We show that an increase in life expectancy increases the growth rate in the economy without PHF, but that it has an inverted U-shaped relation in the economy with PHF. From the welfare standpoint, we show that it increases the intergenerational conflict between current and future generation and that PHF has the result of alleviating the conflict.life expectancy, household production, economic growth, social welfare

Intergenerational Transfers of Time and Public Long-term Care with an Aging Population

In this paper, we use a two-period overlapping generations model to examine the behavior of an economy that incorporates intergenerational transfers of time. In the first part, we describe the dynamics and steady state of the economy in which there is no government. We show that the rate of life expectancy has negative impact on the steady-state level of the capital stock. In the second part, we study the role and the effect of public long-term care policy. We also show that public long-term care lowers the steady-state level of the capital stock but enhances the welfare when the rate of tax is small.time transfers, household production, overlapping generations

Equilibrium Dynamics in an Overlapping Generations Economy with Endogenous Labor Supply

This note develops a one-sector, two-period, overlapping generations model that incorporates endogenous labor-care choice. Care choice is modeled by allowing young agents to participate in the production of household health status. Using this model, we derive the steady-state equilibrium dynamics.care supply, equilibrium dynamics, household production