Hormones and Capital

Do hormones determine human and physical capital by rewarding production and learning? A key prediction that the paper tests is that real gross domestic product, in total or per capita terms, which is indirectly produced by hormones, correlates positively with life expectancy. This is because hormones enable the species to flourish by encouraging economic activity that improves institutions, such as medical research, that increase life expectancy. The paper develops a dynamic optimization model of how hormones affect life expectancy. It tests a reduced form of the model with a panel dataset of 181 countries over the period from 2015 through 2020, yielding more than a thousand observations. Independent variables include the growth rate of gross domestic product (which is a proxy for the growth rate of hormones), the share of youths in the national population (an alternative proxy for the growth rate of hormones), the share of middle-aged adults in the population (which measures family learning about health, which can increase life expectancy), the rate of enrollment in secondary schools among age-eligible youths (which measures general education), the female share of the population (which measures the impact on life expectancy of hormones that promote trust, such as oxytocin), the infant mortality rate, and country fixed effects. All data are from the World Development Indicators of the World Bank. The paper does not find strong evidence that hormones affect economic activity by motivating production.