Health and education investments in human capital, the impacts on fertility and economic growth

Zhehao Wang ()
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Zhehao Wang: Osaka School of International Public Policy, Osaka University

No 25-14, Discussion Papers in Economics and Business from Osaka University, Graduate School of Economics

Abstract: In this paper, we explore the impacts of government policies on endogenous fertility and economic growth in a full-fledged framework with private and public spending on both health and education. First, we show that excessive government expenditure on education and insufficient government expenditure on health may lead to zero or even negative economic growth. Second, in our specified model, the income tax rate is shown to have no impact on fertility. Third, we determine the income tax rate and the fraction of revenue used for education expenditure to maximize the balanced growth rate. Furthermore, it is demonstrated that larger public health expenditure on children leads to greater economic growth. Moreover, the welfare-maximizing tax rate and shares of public expenditure allocated to children’s health and education are found to be smaller than the growth-maximizing counterparts. Finally, the welfare-maximizing tax rate exhibits a non-monotonic relationship with social discount factor.

Keywords: human capital; fertility; growth; health; education (search for similar items in EconPapers)
JEL-codes: I10 I20 O40 (search for similar items in EconPapers)
Pages: 27 pages
Date: 2025-11
New Economics Papers: this item is included in nep-gro
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