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

Public provision of healthcare and basic research: What are the joint effects on economic growth and welfare? | Research Square window.SnipcartSettings = { analytics: { enabled: false } }; (function() { var accessVector = localStorage.getItem('access_vector') || ''; window.dataLayer = window.dataLayer || []; if (accessVector) { window.dataLayer.push({ user: { profile: { profileInfo: { snid: accessVector } } } }); } })(); (function(w,d,s,l,i){w[l]=w[l]||[];w[l].push({'gtm.start':new Date().getTime(),event:'gtm.js'});var f=d.getElementsByTagName(s)[0],j=d.createElement(s),dl=l!='dataLayer'?'&l='+l:'';j.async=true;j.src='https://www.googletagmanager.com/gtm.js?id='+i+dl;f.parentNode.insertBefore(j,f);})(window,document,'script','dataLayer','GTM-K279D39R'); Browse Preprints In Review Journals COVID-19 Preprints AJE Video Bytes Research Tools Research Promotion AJE Professional Editing AJE Rubriq About Preprint Platform In Review Editorial Policies Our Team Advisory Board Help Center Sign In Submit a Preprint Cite Share Download PDF Research Article Public provision of healthcare and basic research: What are the joint effects on economic growth and welfare? Pintu Parui, Klaus Prettner This is a preprint; it has not been peer reviewed by a journal. https://doi.org/ 10.21203/rs.3.rs-4363264/v1 This work is licensed under a CC BY 4.0 License Status: Published Journal Publication published 15 Jan, 2025 Read the published version in Journal of Economic Growth → Version 1 posted 9 You are reading this latest preprint version Abstract We propose a generalized R&D-based economic growth model that incorporates endogenous human capital accumulation in terms of education and health and the public provision of healthcare and basic science. The government taxes households to pay for healthcare personnel and basic researchers. These employees are not anymore available for applied research and for final goods production. Thus, important intertemporal tradeoffs emerge for economic growth and welfare with respect to government spending policies. While increasing public spending on health and basic research may decrease economic growth and welfare in the short run, we show that they foster economic growth in the medium run and tend to raise long-run welfare when compared to actual levels of spending in Organisation for Economic Co-operation and Development (OECD) countries. Our results highlight the importance of adequate public funding for healthcare and basic research to foster long-run economic prosperity. JEL Code: H41; J24; O31; O32; O41 R&D-Based Growth Basic Research Public Healthcare Children’s Health Education Fertility Intertemporal Tradeoffs. Full Text Additional Declarations No competing interests reported. Cite Share Download PDF Status: Published Journal Publication published 15 Jan, 2025 Read the published version in Journal of Economic Growth → Version 1 posted Editorial decision: Revision requested 04 Jul, 2024 Reviews received at journal 02 Jul, 2024 Reviews received at journal 28 May, 2024 Reviewers agreed at journal 16 May, 2024 Reviewers agreed at journal 09 May, 2024 Reviewers invited by journal 09 May, 2024 Submission checks completed at journal 09 May, 2024 Editor assigned by journal 09 May, 2024 First submitted to journal 03 May, 2024 You are reading this latest preprint version Research Square lets you share your work early, gain feedback from the community, and start making changes to your manuscript prior to peer review in a journal. As a division of Research Square Company, we’re committed to making research communication faster, fairer, and more useful. We do this by developing innovative software and high quality services for the global research community. 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