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DEATH AND CAPITAL

Published online by Cambridge University Press:  11 September 2019

Shankha Chakraborty  and
Mausumi Das
Shankha Chakraborty
Affiliation:
University of Oregon
Mausumi Das*
Affiliation:
Delhi School of Economics
*
Address correspondence to: Mausumi Das, Department of Economics, Delhi School of Economics, University of Delhi, Delhi 110007, India. e-mail: mausumi@econdse.org.
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Abstract

In a life-cycle model with dynastic households, parents value the transfer of tangible assets to their offspring in the event of premature death. This raises the subjective reward from investing in them relative to intangible human capital and tilts investment choice away from the latter. These effects of mortality on human capital risk and relative investment can translate into divergent growth paths, delayed transition from physical to human capital accumulation, and a dampened response to mortality shock in developing countries.

Keywords

MortalityHuman Capital RiskAltruismGrowth
Type
Articles
Information
Macroeconomic Dynamics , Volume 25 , Issue 6 , September 2021 , pp. 1472 - 1494
Copyright
© Cambridge University Press 2019

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Footnotes

This is a much revised version of a portion of our 2009 working paper with the same title. For discussions and comments, we thank Ania Aksan, Jeff Allen, David de la Croix, Oksana Leukhina, and participants at various venues the paper was presented, including the “Health and the Macroeconomy” conference at LAEF, UCSB (2009), SAET conference in Taiwan (2018), and 14th Annual Conference at ISI, Delhi (2018). Thanks also to an associate editor and two anonymous referees of this journal for their feedback. Mausumi Das acknowledges financial assistance from the Bill & Melinda Gates Foundation. The usual caveat applies.

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