DP5246 Death and Development

Author(s): Peter L. Lorentzen , John McMillan , Romain Wacziarg

Publication Date: September 2005

Keyword(s): fertility , growth , human capital , investment , mortality

JEL(s): I10 , J10 , O10

Programme Areas: Institutions and Economic Performance

Link to this Page: www.cepr.org/pubs/dps/DP5246.asp

Analyzing a variety of cross-national and sub-national data, we argue that high adult mortality reduces economic growth by shortening time horizons. Higher adult mortality is associated with increased levels of risky behaviour, higher fertility, and lower investment in physical and human capital. Furthermore, the feedback effect from economic prosperity to better health care implies that mortality could be the source of a poverty trap. In our regressions, adult mortality explains almost all of Africa's growth tragedy. Our analysis also underscores grim forecasts of the long-run economic costs of the ongoing AIDS epidemic.