Life Expectancy, Schooling, and Lifetime Labor Supply: Theory and Evidence Revisited

Abstract

Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. www.econstor.eu This paper presents a theoretical and empirical analysis of the role of life expectancy for optimal schooling and lifetime labor supply. The results of a simple prototype Ben-Porath model with age-specific survival rates show that an increase in lifetime labor supply is not a necessary, nor a sufficient, condition for greater life expectancy to increase optimal schooling. The observed increase in survival rates during working ages that follows from the "rectangularization" of the survival function is crucial for schooling and labor supply. The empirical results suggest that the relative benefits of schooling have been increasing across cohorts of US men born . A simple quantitative analysis shows that a realistic shift in the survival function can lead to an increase in schooling and a reduction in lifetime labor hours. Terms of use: Documents in D I S C U S S I O N P A P E R S E R I E SJEL Classification: E20, J22, J24, J26, O11

Spurring Economic Growth through Human Development: Research Results and Guidance for Policymakers

“…Similar pathways suggest that health investments pay off over and above the increases in longevity and reductions in morbidity that are beneficial at the individual level. The literature focuses especially on the following channels: (1) healthier workers are more productive and contribute more to aggregate output (Fogel 1994(Fogel , 1997Shastry and Weil 2003;Weil 2007;Kuhn and Prettner 2016;Bloom,Kuhn, and Prettner 2019b); (2) healthier children tend to perform better in school, which enhances their potential for human capital accumulation (Miguel and Kremer 2004;Bleakley and Lange 2009;Field, Robles, and Torero 2009;Bleakley 2010Bleakley , 2011Bloom, Kuhn, and Prettner 2017b;Baldanzi et al 2021); (3) healthier individuals are more inclined to educate themselves and to invest (Ben-Porath 1967;Kalemli-Ozcan et al 2000;Bloom, Canning, and Graham et al 2003a;2007;Bloom, Canning, Moore 2014b;Cervellati andSunde 2005, 2013;Prettner 2013); and (4) health investments (such as vaccination) that cure or prevent infectious diseases have positive spillovers to other individuals (Luca and Bloom 2018). Here, too, the positive effect found in micro-based studies is consistent with the macro-based evidence that health is an important determinant of economic growth (Barro 1991;Sala-i-Martin 1997;Sala-i-Martin,Doppelhofer, and Miller 2004;Lorentzen et al 2008;Suhrcke and Urban 2010;Aghion, Howitt, and Murtin 2011;Cervellati and Sunde 2011;Bloom, Canning, and Fink 2014a;Bloom et al 2019a).…”

“…Poor health status of the population: The population's general health status could be very low; for example, due to widespread infectious diseases. Consequently, life expectancy might be so low that private investments in education do not pay off (Ben-Porath 1967;Cervellati andSunde 2005, 2013). Poor population health and its negative consequences for education limit the country's potential for growth, inducing a poverty trap.…”

The effect of health on economic growth: a meta-regression analysis

“…The main channel for health to affect economic growth in less developed countries is demographic transition and the timing of having sustained long-run economic growth. The increase in life expectancy has led to demographic transition, whereby human capital investments become higher because the working age is longer (Ben-Porath 1967 ; Cervellati and Sunde 2013 ). The decline in mortality also drives parents to have fewer children, which leads to better educated population and subsequently creates an economic–demographic transition.…”

Effects of adult mortality rate on educational attainment: empirical analysis using cross-country panel data

“…This situation encourages the young generation to invest in human capital. Therefore, the adult mortality rate has a negative effect on educational attainment [ 8 , 14 , 19 – 21 , 27 , 29 , 31 ]. The above-mentioned theoretical studies have not conducted enough econometric analysis although they contributed to extending elaborate theory.…”