Health, Longevity, and the Productivity Slowdown

Abstract

In this paper, we develop an endogenous growth model that integrates skill driven technological change, human capital accumulation through formal schooling, with health capital accumulation. The relationships among economic growth, average health level, labor allocation, and longevity of the population are investigated. Within this framework, the present model shows that the improved public health environment is indispensable for sustainable development. The better growth situation only appears when an economy has a higher level of public health as a social basis. Therefore, a healthy body, which is sustained by the improved public health environment and individual's health investment, becomes a necessary condition for long-term development. Moreover, we apply a model part to the explanation of productivity slowdown in Western economies. First, it is theoretically shown that the productivity slowdown has a possibility to occur with aging of the population. In this connection, our conjecture that the slowdown is caused by aging phenomenon through rises in longevity is investigated by the simple econometric tests. Within the narrow limits of our studies, as for the phenomena of continuously slowdown in advanced economies, the possibility to be the inevitable ones is indicated.Skill driven technological change, Health capital, Human capital, Aging, Productivity slowdown, Longevity