Public provision of healthcare and basic science: What are the effects on economic growth and welfare?

Pintu Parui and Klaus Prettner

Department of Economics Working Papers from Vienna University of Economics and Business, Department of Economics

Abstract: We propose a generalized R&D-based economic growth model that incorporates i) endogenous human capital accumulation in terms of education and health, ii) endogenous population growth, and iii) the public provision of healthcare and basic science. The government taxes households to pay for healthcare personnel and basic scientists. Since these employees are not anymore available for applied science and for final goods production, important tradeoffs with respect to government spending emerge for economic growth and welfare. We show that increasing public spending, particularly on basic science, leads to faster economic growth in the medium run and tends to raise welfare when compared to actual levels of spending in Organisation for Economic Co-operation and Development (OECD) countries. Our results highlight the difficult tradeoffs associated with public expenditures for healthcare and basic science and emphasize the important role of policymakers in ensuring adequate overall public funding.

Keywords: R&D-Based Growth; Basic Science; Public Healthcare; Children's Health; Education; Fertility; Intertemporal Tradeoffs (search for similar items in EconPapers)
JEL-codes: H41 J24 O31 O32 O41 (search for similar items in EconPapers)
Date: 2024-04
New Economics Papers: this item is included in nep-gro, nep-lma and nep-tid
Note: PDF Document
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://research.wu.ac.at/ws/portalfiles/portal/62095991/WP365.pdf (application/pdf)

Related works:
Working Paper: Public provision of healthcare and basic science: What are the effects on economic growth and welfare? (2024)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:wiw:wiwwuw:wuwp365

Access Statistics for this paper

More papers in Department of Economics Working Papers from Vienna University of Economics and Business, Department of Economics Welthandelsplatz 1, 1020 Vienna, Austria.
Bibliographic data for series maintained by Department of Economics ().