The effects of health investments on human capital and R&D-driven economic growth

We propose an R&D-based growth model in which the stock of human capital of the next generation is determined by parental education and health investments. We show that there is a complementarity between education and health: if parents want to have better educated children, they also need to increase health investments and vice versa. We also show that population growth has a negative e↵ect on long-run economic growth, which is consistent with the empirical evidence for modern economies in the twentieth century. Altogether, our framework provides a complementary mechanism to explain the finding that health investments reduce fertility and raise economic growth.