Infectious diseases, human capital and economic growth. (English) Zbl 1458.91135
Summary: Stylized facts show there is a clustering of countries in three balanced growth paths characterized by differing income/growth, human capital and incidence of infectious diseases. To explain this, we develop a dynamic general equilibrium model incorporating SIS epidemiology dynamics, where households choose how much to invest in human and physical capital, as well as in controlling the risk of infection. In the decentralized economy, households do not internalize the externality of controlling infection. There are multiple balanced growth paths where the endogenous prevalence of the disease determines whether human capital is accumulated or not, i.e., whether there is sustained economic growth or a poverty trap. We characterize the optimal public health policy that internalizes the disease externality and the subsidy that decentralizes it. Perversely, for countries in a poverty trap and most afflicted with diseases, the optimal subsidy is lower than for growing economies. We also study the quantitative effects of better control of diseases, and of increasing life expectancy on countries in a poverty trap.
MSC:
| 91B62 | Economic growth models |
| 92D30 | Epidemiology |
| 91B50 | General equilibrium theory |
| 91B39 | Labor markets |
Keywords:
endogenous growth; infectious diseases; epidemiology; poverty trap; public health policy; human capitalReferences:
| [1] | Acemoglu, D.; Johnson, S., Disease and development: the effect of life expectancy on economic growth, J. Political Econ., 115, 925-985 (2007) |
| [2] | Aksan, A-M; Chakraborty, S., Mortality versus morbidity in demographic transition, Eur. Econ. Rev., 70, 470-492 (2014) |
| [3] | Antunes, JL; Waldman, EA, The impact of AIDS, immigration and housing overcrowding on tuberculosis deaths in Sao Paulo, Brazil, 1994-1998, Soc. Sci. Med., 52, 7, 1071-80 (2001) |
| [4] | Ashraf, QH; Lester, A.; Weil, DN, When does improving health raise GDP?, NBER Macroecon. Annu., 23, 157-204 (2008) |
| [5] | Azomahou, TT; Bouccekkine, R.; Diene, B., HIV/AIDS and development: a reappraisal of the productivity and factor accumulation effects, Am. Econ. Rev. Pape. Proc., 106, 5, 472-477 (2016) |
| [6] | Banerjee, A.; Duflo, E., Poor Economics (2011), Philadelphia: Perseus Books Group, Philadelphia |
| [7] | Barro, R.; Lee, JW, A new data set of educational attainment in the world, 1950-2010, J. Dev. Econ., 104, 184-198 (2013) |
| [8] | Bleakley, H., Disease and development: evidence from hookworm eradication in the American South, Q. J. Econ., 122, 73-117 (2007) |
| [9] | Bleakley, H., Malaria eradication in the Americas: a retrospective analysis of childhood exposure, Am. Econ. J. Appl. Econ, 2, 1-45 (2010) |
| [10] | Bleakley, H.; Lange, F., Chronic disease burden and the interaction of education, fertility and growth, Rev. Econ. Stat., 91, 52-65 (2009) |
| [11] | Bloom, DE; Canning, D.; Fink, G., Diseases and development revisited, J. Political Econ., 122, 1355-1366 (2014) |
| [12] | Bosi, S., Desmarchelier.: Pollution and infectious diseases. Int. J. Econ. Theory. 14(4), 351-372 (2018) · Zbl 1419.91415 |
| [13] | Bonds, M.H., Keenan, D.C., Rohani, P., Sachs, J.D.: Poverty trap formed by the ecology of infectious diseases. In: Proceedings of the Royal Society (2009) |
| [14] | Chakrabory, S.; Papageorgiou, C.; Perez-Sebastian, F., Diseases, infection dynamics and development, J. Monet. Econ., 57, 859-872 (2010) |
| [15] | Chakrabory, S.; Papageorgiou, C.; Perez-Sebastian, F., Health cycles and health transitions, Macroecon. Dyn., 20, 1, 189-213 (2016) |
| [16] | Chauhan, A.; Johnston, SL, Air pollution and infection in respiratory illness, Br. Med. Bull., 68, 1, 95-112 (2003) |
| [17] | Cohen, S.; Williamson, GM, Stress and infectious diseases in humans, Psychol. Bull., 109, 1, 5-24 (1991) |
| [18] | Clarke, K.E.N.: Review of the epidemiology of diphtheria - 2000-2016, US Centers for Disease Control and Prevention (2018) |
| [19] | Cutler, D.; Fung, W.; Kremer, M.; Singhal, M.; Vogl, T., Early-life malaria exposure and adult outcomes: evidence from malaria eradication in India, Am. Econ. J. Appl. Econ., 2, 72-94 (2010) |
| [20] | Decosas, J., Migration and AIDS, Lancet, 346, 826-828 (1995) |
| [21] | Delfino, D., Simmons, P.J.: Positive and normative issues of economic growth with infectious diseases. Discussion Papers in Economics, University of York (2000) |
| [22] | Epstein, PR, Climate change and emerging infectious diseases, Microbes Infect., 3, 747-754 (2001) |
| [23] | Fischer, S.: The global low level of real interest rates. BIS Speech (2017) |
| [24] | Fortson, JG, HIV/AIDS and fertility, Am. Econ. J. Appl. Econ., 1, 3, 170-194 (2009) |
| [25] | Fortson, JG, Mortality risk and human capital investment: the impact of HIV/AIDS in Sub-Saharan Africa, Rev. Econ. Stat., 93, 1-15 (2011) |
| [26] | Fox, MP, The impact of HIV/AIDS on labor productivity in Kenya, Trop. Med. Int. Health, 9, 318-324 (2004) |
| [27] | Fuller, TD, Chronic stress and psychological well-being: evidence from Thailand on household crowding, Soc. Sci. Med., 42, 2, 265-280 (1996) |
| [28] | Gallup, J.; Sachs, JD, The economic burden of malaria, Am. J. Trop. Med. Hyg., 64, S1, 85-96 (2001) |
| [29] | Geoffard, P-Y; Philipson, T., Rational epidemics and their public control, Int. Econ. Rev., 37, 3, 603-24 (1996) · Zbl 0862.90038 |
| [30] | Gersovitz, M.; Hammer, JS, The economical control of infectious diseases, Econ. J., 114, 492, 1-27 (2004) |
| [31] | Godbout, JP; Glaser, R., Stress-induced immune dysregulation: implications for wound healing, infectious disease and cancer, J. Neuroimmune Pharmacol., 1, 421-427 (2006) |
| [32] | Goenka, A.; Liu, L., Infectious diseases and endogenous fluctuations, Econ. Theory, 50, 1, 125-149 (2012) · Zbl 1258.91151 · doi:10.1007/s00199-010-0553-y |
| [33] | Goenka, A.; Liu, L.; Nguyen, M-H, Infectious diseases and economic growth, J. Math. Econ., 50, 34-53 (2014) · Zbl 1284.91370 |
| [34] | Gokhale, K.: Leprosy return shows neglect in India of ancient blight, Bloomberg News (18/09/2013) |
| [35] | Gollin, D., Getting income shares right, J. Political Econ., 110, 458-474 (2002) |
| [36] | Gottret, P.; Schieber, G., Health Financing Revisited: A Practitioner’s Guide (2006), Washington: The World Bank, Washington |
| [37] | Herbert, TB; Cohen, S., Stress and immunity in humans: A meta-analytic review, Psychosom. Med., 55, 364-379 (1993) |
| [38] | Hethcote, HW, A thousand and one epidemic models, Front. Theor. Biol., 100, 504-515 (1994) · Zbl 0819.92020 |
| [39] | Hethcote, HW, The Basic Epidemiology Models, Epidemiology Models with Variable Population Size, and Age-Structured Epidemiology Models, Mathematical Understanding of Infectious Disease Dynamics (2008), Singapore: World Scientific, Singapore |
| [40] | Inobaya, MT, Prevention and control of schistosomiasis: a current perspective, Res. Rep. Trop. Med., 5, 65-75 (2014) |
| [41] | Kalemli-Ozcan, S.; Turan, B., HIV and fertility revisited, J. Dev. Econ., 96, 61-65 (2011) |
| [42] | Kalemli-Ozcan, S.; Ryder, H.; Weil, DN, Mortality decline, human capital investment, and economic growth, J. Dev. Econ., 62, 1-23 (2000) |
| [43] | Kremer, M., Integrating behavioural choice into epidemiological models of the AIDS epidemic, Q. J. Econ., 111, 549-573 (1996) · Zbl 0845.92022 |
| [44] | Lucas, A., Malaria eradication and educational attainment: evidence from Paraguay and Sri Lanka, Am. Econ. J. Appl. Econ., 2, 46-71 (2010) |
| [45] | Lucas, RE, On the mechanics of economic development, J. Monet. Econ., 22, 3-42 (1988) |
| [46] | Manuelli, R.: Disease and development: The role of human capital. HCEO Working Paper, Chicago (2011) |
| [47] | McMichael, A.J.: Environmental and social influences on emerging infectious diseases: past, present and future. Philos. Trans. R. Soc. Lond. B. Biol. Sci. 359(1447), 1049-1058 (2004) |
| [48] | McMichael, AJ; Woodruff, RE; Hales, S., Climate change and human health: present and future risks, Lancet, 367, 859-69 (2006) |
| [49] | Miguel, E.; Kremer, M., Worms: identifying impacts on education and health in the presence of treatment externalities, Econometrica, 72, 159-217 (2004) · Zbl 1137.92328 |
| [50] | Murray, CJL, Disability-adjusted life years (DALYs) for 291 diseases and injuries in 21 regions, 1990-2010: a systematic analysis of global burden of disease study 2010, Lancet, 380, 2197-2223 (2012) |
| [51] | Patz, JA, Effects of environmental change on emerging parasitic diseases, International Journal for Parasitology, 30, 1395-1405 (2000) |
| [52] | Patz, JA; McMichael, AJ, Climate change and infectious diseases, Climate Change and Human Health: Risks and Responses, 103-132 (2003), Geneva: OMS, Geneva |
| [53] | Pavlovsky, EN, Natural Nidality of Transmissible Diseases (1966), Urbana: University of Illinois Press, Urbana |
| [54] | Peterson, PK, Stress and pathogenesis of infectious disease, Rev. Infect. Dis., 13, 4, 710-720 (1991) |
| [55] | Quah, D., Empirical cross-section dynamics in economic growth, Eur. Econ. Rev., 37, 426-434 (1993) |
| [56] | Salomon, JA, Common values in assessing health outcomes from disease and injury: disability weights measurement study for the Global Burden of Disease Study 2010, Lancet, 380, 2129-2143 (2012) |
| [57] | Soares, R., Mortality reductions, educational attainment, and fertility choice, Am. Econ. Rev., 95, 3, 580-601 (2005) |
| [58] | Sobngwi, E., Exposure over the life course to an urban environment and its relation with obesity, diabetes, and hypertension in rural and urban Cameroon, Int. J. Epidemiol., 33, 769-776 (2004) |
| [59] | Steinmann, P.; Keiser, J.; Bos, R.; Tanner, M.; Utzinger, J., Schistosomiasis and water resources development: systematic review, meta-analysis, and estimates of people at risk, Lancet, 6, 7, 411-425 (2006) |
| [60] | Tarozzi, A.; Mahajan, A.; Yoong, J.; Blackburn, B., Commitment mechanisms and compliance with health-protecting behavior: preliminary evidence from Orissa, India, Am. Econ. Rev. Pap. Proc., 99, 2, 231-235 (2009) |
| [61] | Tatem, AJ; Rogers, DJ; Hay, SI, Global transport networks and infectious disease spread, Adv. Parasitol., 62, 293-343 (2006) |
| [62] | Weisbrod, B., Disease and development: the impact of parasitic diseases in St. Lucia, Int. J. Soc. Econ., 1, 1, 111-117 (1974) |
| [63] | World Bank, Data on real interest rates. https://data.worldbank.org/indicator/fr.inr.rinr. Accessed 19 Mar 2019 |
| [64] | World Bank, Data on health, https://data.worldbank.org/topic/health. Accessed 2 July 2019 |
| [65] | Xu, K., Saksena, P., Holly, A.: The determinants of health expenditure: a country-level panel data analysis. World Health Organization, Working Paper (2011) |
This reference list is based on information provided by the publisher or from digital mathematics libraries. Its items are heuristically matched to zbMATH identifiers and may contain data conversion errors. In some cases that data have been complemented/enhanced by data from zbMATH Open. This attempts to reflect the references listed in the original paper as accurately as possible without claiming completeness or a perfect matching.
