or lower fertility rates. Yet, even if parents are sufficiently risk-avers to generate a positive
correlation between mortality and population growth, the effect disappears entirely if one allows
sequential child bearing i.e. the possibility to replace children who die early. This has recently
been shown by Doepke (2005) who therefore argues in favor of the easier to handle deterministic
model because it “leads to virtually the same conclusions as the stochastic model with sequential
fertility choice.” Using a deterministic model, the present paper offers an alternative explanation
for a positive link between mortality and population growth that operates through child health
care expenditure.
The paper is also loosely related to a series of articles investigating the influence of longevity
on human capital accumulation and economic growth.5 Sharing some of the demo-economic
mechanisms at work, the present paper deviates from these articles by its focus on geography,
child mortality and child expenditure. Ehrlich and Lui (1992) and Soares (2005) connect both
literatures by investigating fertility and educational choice when both adult and child survival are
uncertain. The main difference to these articles is the role of health expenditure in the present
paper. A recent complementary study is provided by Corrigan et al. (2005) who investigate the
influence of the AIDS epidemic on human capital accumulation and growth through the creation
of orphans.
Some ideas developed in this paper were already apparent in Blackburn and Cipriani (1998)
and Strulik (2004). Blackburn and Cipriani investigate a Barro-Becker (1989) model with en-
dogenous health and mortality and focus on transitional dynamics that are consistent with the
historic successful development of the Western world, while the current paper investigates the
impact of geography on delayed and possibly stalled demographic transition in today least de-
veloped countries. In Strulik (2004) the central message was obscured by some non-standard
assumptions about the utility function leading to an awkward differentiation between interior
and corner solutions. Here, the paper employs the incidence of subsistence consumption and
derives its central results much more elegantly and stringently without recurring on corner solu-
tions. As a co-product of subsistence consumption the model can explain why savings rates and
the intertemporal elasticity of substitution rise along a path of successful development. This
relates the paper to general research on growth with subsistence consumption, notably Easterly
(1994), Ben-David (1998), and Steger (2000).
5See, e.g. Blackburn and Cipriani (2002), Boucekkine et al. (2003), Chakraborty (2004), and Cervelatti and Sunde
(2005).