Mortality, Human Capital and Persistent Inequality

Available evidence suggests high intergenerational correlation of economic status and persistent disparities in health status between the rich and the poor. This paper proposes a mechanism linking the two. We introduce health capital into a two-period overlapping generations model. Private health investment improves the probability of surviving from the first period of life to the next and, along with education, enhances an individual’s labor productivity. Poorer parents are of poor health, unable to invest much in reducing mortality risk and improving their human capital. Consequently, they leave less for their progeny. Despite convex preferences and technologies, initial differences in economic and health status may perpetuate across generations when annuities markets are imperfect. Copyright Springer 2005

[1]  Peter A. Streufert,et al.  Dynamic equilibria with unemployment due to undernourishment , 1993 .

[2]  J. Barendregt,et al.  Global burden of disease , 1997, The Lancet.

[3]  Nancy L. Stokey,et al.  Lecture Shirtsleeves to Shirtsleeves : The Economics of Social Mobility , 1996 .

[4]  Scott J Freeman,et al.  Equilibrium Income Inequality among Identical Agents , 1996, Journal of Political Economy.

[5]  R. Wilkinson.  Unhealthy Societies: The Afflictions of Inequality , 1996 .

[6]  M. Yaari,et al.  Uncertain lifetime, life insurance, and the theory of the consumer , 1965 .

[7]  J. Scheinkman,et al.  Federal Reserve Bank of Minneapolis Research Department Staff Report 314 Wealth Inequality and Intergenerational Links , 2022 .

[8]  Omer Moav.  Income distribution and macroeconomics: the persistence of inequality in a convex technology framework , 2002 .

[9]  Nancy L. Stokey.  Frontiers of Research in Economic Theory: Shirtsleeves to Shirtsleeves: The Economics of Social Mobility (1996) , 1998 .

[10]  P. Menchik,et al.  Income Distribution, Lifetime Savings, and Bequests , 1983 .

[11]  J M Lepkowski,et al.  Socioeconomic factors, health behaviors, and mortality: results from a nationally representative prospective study of US adults. , 1998, JAMA.

[12]  Andrew A. Samwick.  Discount Rate Heterogeneity and Social Security Reform , 1997 .

[13]  M. Obstfeld.  Intertemporal dependence, impatience, and dynamics☆ , 1990 .

[14]  Robert W. Fogel,et al.  New findings on secular trends in nutrition and mortality: Some implications for population theory , 1997 .

[15]  Debraj Ray,et al.  Contractual Structure and Wealth Accumulation , 2002 .

[16]  A. Banerjee,et al.  Occupational Choice and the Process of Development , 1993, Journal of Political Economy.

[17]  J. Kvalsvig,et al.  The effects of parasite infections on cognitive processes in children. , 1991, Annals of tropical medicine and parasitology.

[18]  Jere R. Behrman,et al.  The Impact of Health and Nutrition on Education , 1996 .

[19]  Casey B. Mulligan,et al.  Parental Priorities and Economic Inequality , 1998 .

[20]  Maitreesh Ghatak,et al.  A simple model of inequality, occupational choice, and development , 2002 .

[21]  J. Andreoni.  Giving with Impure Altruism: Applications to Charity and Ricardian Equivalence , 1989, Journal of Political Economy.

[22]  Gary Solon,et al.  Intergenerational Income Mobility in the United States , 1992 .

[23]  Oded Galor,et al.  The Distribution of Human Capital and Economic Growth , 1997 .

[24]  P. Bolton,et al.  A Theory of Trickle-Down Growth and Development , 1997 .

[25]  John S. Strauss,et al.  Does Better Nutrition Raise Farm Productivity? , 1986, Journal of Political Economy.

[26]  Gary Solon.  Cross-Country Differences in Intergenerational Earnings Mobility , 2002 .

[27]  Oded Galor,et al.  Food for Thought: Basic Needs and Persistent Educational Inequality , 2004 .

[28]  P. Menchik.  Economic status as a determinant of mortality among black and white older men: does poverty kill? , 1993 .

[29]  J. Strauss,et al.  Health and wages: evidence on men and women in urban Brazil. , 1997, Journal of econometrics.

[30]  Victor R. Fuchs.  The Health Economy , 1986 .

[31]  Luisa Fuster,et al.  Effects of uncertain lifetime and annuity insurance on capital accumulation and growth , 1999 .

[32]  Shankha Chakraborty,et al.  Mortality, fertility, and child labor , 2005 .

[33]  Joseph Zeira,et al.  Income Distribution and Macroeconomics , 1988 .

[34]  G. Glomm,et al.  Optimal intertemporal consumption decisions under the threat of starvation , 1993 .

[35]  J. Friedman,et al.  On Uncertain Lifetimes , 1977, Journal of Political Economy.

[36]  S. Durlauf.  A theory of persistent income inequality , 1992 .

[37]  Emily C Lawrance.  Poverty and the Rate of Time Preference: Evidence from Panel Data , 1991, Journal of Political Economy.

[38]  J. Behrman.  The economic rationale for investing in nutrition in developing countries , 1993 .

[39]  D. Weil,et al.  Mortality Decline, Human Capital Investment and Economic Growth , 2000 .

[40]  David J. Zimmerman,et al.  Regression Toward Mediocrity in Economic Stature , 1992 .

[41]  John S. Strauss,et al.  Health nutrition and economic development. , 1998 .

[42]  T. Piketty,et al.  Theories of persistent inequality and intergenerational mobility , 2000 .

[43]  P. Sorlie,et al.  US mortality by economic, demographic, and social characteristics: the National Longitudinal Mortality Study. , 1995, American journal of public health.

[44]  Angus Deaton,et al.  Health, Inequality, and Economic Development , 2001 .

[45]  S. Seshadri,et al.  Impact of iron supplementation on cognitive functions in preschool and school-aged children: the Indian experience. , 1989, The American journal of clinical nutrition.

[46]  T. Piketty,et al.  The Dynamics of the Wealth Distribution and the Interest Rate with Credit Rationing , 1997 .

[47]  Roland Bénabou,et al.  Heterogeneity, Stratification, and Growth: Macroeconomic Implications of Community Structure and School Finance , 1996 .

[48]  Yishay D. Maoz,et al.  Intergenerational Mobility and the Process of Development , 1999 .