Working Paper: NBER ID: w15813
Authors: Philippe Aghion; Peter Howitt; Fabrice Murtin
Abstract: This paper revisits the relationship between health and growth in light of modern endogenous growth theory. We propose a unified framework that encompasses the growth effects of both the rate of improvement of health and the level of health. Based on cross-country regressions over the period 1960-2000, where we instrument for both variables, we find that a higher initial level and a higher rate of improvement in life expectancy both have a significantly positive impact on per capita GDP growth. Then, restricting attention to OECD countries, we find supportive evidence that only the reduction in mortality below age forty generates productivity gains, which in turn may explain why the positive correlation between health and growth in cross-OECD country regressions appears to have weakened since 1960.
Keywords: Health; Economic Growth; Life Expectancy; Endogenous Growth
JEL Codes: I10; O40
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| initial level of life expectancy (J17) | per capita GDP growth (O49) |
| growth rate of life expectancy (J17) | per capita GDP growth (O49) |
| reduction in mortality rates below age 40 (I14) | productivity gains (O49) |
| initial life expectancy and its growth (J17) | economic growth (O49) |
| initial life expectancy (J17) | growth of life expectancy (J17) |
| growth of life expectancy (J17) | economic growth (O49) |