DP4931 Does Longevity Cause Growth?

Author(s): Moshe Hazan , Hosny Zoabi

Publication Date: February 2005

Keyword(s): longevity , health , education , fertility , growth

JEL(s): I10 , I20 , J10 , O11 , O40

Programme Areas: Public Policy

Link to this Page: www.cepr.org/pubs/dps/DP4931.asp

This article challenges conventional wisdom by arguing that greater longevity cannot explain the significant accumulation of human capital during the transition from stagnation to growth. This is because greater longevity raises children’s future income proportionally at all levels of education, leaving the relative return between quality and quantity unaffected. This result is consistent with historical evidence that longevity began to increase long before education did. Our theory also casts doubts on recent findings about a positive effect of health on education. This is because health raises the marginal return on quality and quantity, resulting in an ambiguous effect on the accumulation of human capital. We conclude that longevity and health have had a minor effect, if any, on the transition from stagnation to growth via investment in education.