Score contribution per author:
α: calibrated so average coauthorship-adjusted count equals average raw count
Within the context of an endogenous growth model, it is shown that in the presence of health risks which influence household income, the introduction of a private insurance company increases the long‐term economic growth rate. The introduction of such an institution has two effects on savings: a level effect and a composition effect. Although the presence of this risk‐reducing institution induces a decrease in the level of total savings, as suggested in earlier papers, the rate of illiquid savings, which contribute to growth, increases. JEL Classification E1; G2; O1; O4