ECTS: 6

Year: 2

Semester: I

Instructor: Lisa Grazzini

Both education and health are important determinants of human capital which is widely recognised as a key issue for individual well-being and economic development. On the education side, the course first explores the determinants of educational decisions. It investigates the basic model of education as a human capital investment, discussing the difference between the private and the social return of education, and the models of education as a signaling and a screening device. The roles of human capital for growth are then analysed, by taking also into account the channels through which education and growth may be linked to the process of democratization of a country.

On the health side, first, the course analyses the basic model on the demand for health as a consumption good, a capital investment, and an input into production, stressing the importance of complementarities between health and education. Second, the demand for health insurance is examined with a particular focus on the optimal insurance policies with adverse selection and moral hazard. Then, the course illustrates the peculiarities of the pharmaceutical industry, especially with reference to the trade-off between promoting competition and intellectual property protection. Finally, the differences between pharmaceutical markets in Less Developed Countries and Developed Countries are emphasized, and different types of public Research & Development incentives are discussed.