Human Capital Formation, Life Expectancy and the Process of Economic Development

Matteo Cervellati and Uwe Sunde

No 585, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: This paper provides a unified theory of the transition in income, life expectancy, education and population, experienced by the Western world when passing from an environment of economic stagnation to sustained growth. The transition is based on the interplay between human capital formation, technological progress, and life expectancy. A positive feedback between human capital accumulation and longevity is eventually triggered when endogenous skill-biased technological progress provides sufficiently high returns to human capital for large fractions of the population to outweigh the costs in terms of lifetime spent on education.

Keywords: long-term development; endogenous life expectancy; technological progress; industrial revolution; heterogeneous human capital (search for similar items in EconPapers)
JEL-codes: E10 J10 O10 O40 O41 (search for similar items in EconPapers)
Pages: 32 pages
Date: 2002-09
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (36)

Published - revised version published in: American Economic Review, 2005, 95 (5), 1653-1672

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