Public investment, life expectancy and income growth

摘要

>Based on individual occupational choice in the model including a production function with public investment, this paper presents an examination of how public investment affects the dynamics. Individuals work as skilled labourers or unskilled labourers. As in the model described by Caselli (1999), educational costs are necessary to work as a skilled labourer. Results show that life expectancy determines whether income growth occurs or not. Public investment can bring about income growth if life expectancy is sufficiently high. However, with low life expectancy, the government cannot bring about income growth with an increase in public investment. Therefore, both public investment and life expectancy should be pulled up for income growth.