IDEAS home Printed from https://ideas.repec.org/p/nbr/nberwo/12269.html
   My bibliography  Save this paper

Disease and Development: The Effect of Life Expectancy on Economic Growth

Author

Listed:
  • Daron Acemoglu
  • Simon Johnson

Abstract

What is the effect of increasing life expectancy on economic growth? To answer this question, we exploit the international epidemiological transition, the wave of international health innovations and improvements that began in the 1940s. We obtain estimates of mortality by disease before the 1940s from the League of Nations and national public health sources. Using these data, we construct an instrument for changes in life expectancy, referred to as predicted mortality, which is based on the pre-intervention distribution of mortality from various diseases around the world and dates of global interventions. We document that predicted mortality has a large and robust effect on changes in life expectancy starting in 1940, but no effect on changes in life expectancy before the interventions. The instrumented changes in life expectancy have a large effect on population; a 1% increase in life expectancy leads to an increase in population of about 1.5%. Life expectancy has a much smaller effect on total GDP both initially and over a 40-year horizon, however. Consequently, there is no evidence that the large exogenous increase in life expectancy led to a significant increase in per capita economic growth. These results confirm that global efforts to combat poor health conditions in less developed countries can be highly effective, but also shed doubt on claims that unfavorable health conditions are the root cause of the poverty of some nations.

Suggested Citation

  • Daron Acemoglu & Simon Johnson, 2006. "Disease and Development: The Effect of Life Expectancy on Economic Growth," NBER Working Papers 12269, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:12269
    Note: EFG
    as

    Download full text from publisher

    File URL: http://www.nber.org/papers/w12269.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Anonymous, 1953. "World Health Organization," International Organization, Cambridge University Press, vol. 7(3), pages 425-427, August.
    2. Anonymous, 1955. "World Health Organization," International Organization, Cambridge University Press, vol. 9(2), pages 285-288, May.
    3. Angus Deaton, 2003. "Health, Inequality, and Economic Development," Journal of Economic Literature, American Economic Association, vol. 41(1), pages 113-158, March.
    4. Gary S. Becker & Tomas J. Philipson & Rodrigo R. Soares, 2005. "The Quantity and Quality of Life and the Evolution of World Inequality," American Economic Review, American Economic Association, vol. 95(1), pages 277-291, March.
    5. Schultz, T Paul, 1993. "Mortality Decline in the Low-Income World: Causes and Consequences," American Economic Review, American Economic Association, vol. 83(2), pages 337-342, May.
    6. Daron Acemoglu & Simon Johnson, 2007. "Disease and Development: The Effect of Life Expectancy on Economic Growth," Journal of Political Economy, University of Chicago Press, vol. 115(6), pages 925-985, December.
    7. Thomas, Duncan & Strauss, John, 1997. "Health and wages: Evidence on men and women in urban Brazil," Journal of Econometrics, Elsevier, vol. 77(1), pages 159-185, March.
    8. Anonymous, 1950. "World Health Organization," International Organization, Cambridge University Press, vol. 4(3), pages 501-505, August.
    9. Anonymous, 1947. "World Health Organization," International Organization, Cambridge University Press, vol. 1(1), pages 134-136, February.
    10. Anonymous, 1951. "World Health Organization," International Organization, Cambridge University Press, vol. 5(3), pages 613-617, August.
    11. repec:idb:brikps:42218 is not listed on IDEAS
    12. Kalemli-Ozcan, Sebnem, 2002. "Does the Mortality Decline Promote Economic Growth?," Journal of Economic Growth, Springer, vol. 7(4), pages 411-439, December.
    13. Sebnem Kalemli-Ozcan, 2012. "AIDS, “reversal” of the demographic transition and economic development: evidence from Africa," Journal of Population Economics, Springer;European Society for Population Economics, vol. 25(3), pages 871-897, July.
    14. Clive Bell & Shantayanan Devarajan & Hans Gersbach, 2003. "The long-run economic costs of AIDS : theory and an application to South Africa," Policy Research Working Paper Series 3152, The World Bank.
    15. Rodrigo R. Soares, 2005. "Mortality Reductions, Educational Attainment, and Fertility Choice," American Economic Review, American Economic Association, vol. 95(3), pages 580-601, June.
    16. David N. Weil, 2005. "Accounting for the Effect of Health on Economic Growth," NBER Working Papers 11455, National Bureau of Economic Research, Inc.
    17. Anonymous, 1953. "World Health Organization," International Organization, Cambridge University Press, vol. 7(2), pages 279-280, May.
    18. David E. Bloom & Jeffrey D. Sachs, 1998. "Geography, Demography, and Economic Growth in Africa," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 29(2), pages 207-296.
    19. John Luke Gallup & Jeffrey D. Sachs & Andrew D. Mellinger, 1999. "Geography and Economic Development," International Regional Science Review, , vol. 22(2), pages 179-232, August.
    20. Galor, Oded, 2005. "From Stagnation to Growth: Unified Growth Theory," Handbook of Economic Growth, in: Philippe Aghion & Steven Durlauf (ed.), Handbook of Economic Growth, edition 1, volume 1, chapter 4, pages 171-293, Elsevier.
    21. Anonymous, 1956. "World Health Organization," International Organization, Cambridge University Press, vol. 10(2), pages 321-322, May.
    22. Angus Deaton, 2004. "Health in an age of globalization," Working Papers 245, Princeton University, Woodrow Wilson School of Public and International Affairs, Center for Health and Wellbeing..
    23. Anonymous, 1954. "World Health Organization," International Organization, Cambridge University Press, vol. 8(1), pages 148-152, February.
    24. Gary D. Hansen & Edward C. Prescott, 2002. "Malthus to Solow," American Economic Review, American Economic Association, vol. 92(4), pages 1205-1217, September.
    25. Peter Lorentzen & John McMillan & Romain Wacziarg, 2008. "Death and development," Journal of Economic Growth, Springer, vol. 13(2), pages 81-124, June.
    26. Anonymous, 1950. "World Health Organization," International Organization, Cambridge University Press, vol. 4(4), pages 683-686, November.
    27. Anonymous, 1951. "World Health Organization," International Organization, Cambridge University Press, vol. 5(2), pages 387-389, May.
    28. Anonymous, 1956. "World Health Organization," International Organization, Cambridge University Press, vol. 10(3), pages 489-491, August.
    29. Anonymous, 1956. "World Health Organization," International Organization, Cambridge University Press, vol. 10(4), pages 642-644, November.
    30. David Cutler & Angus Deaton & Adriana Lleras-Muney, 2006. "The Determinants of Mortality," Journal of Economic Perspectives, American Economic Association, vol. 20(3), pages 97-120, Summer.
    31. Stock, James H & Wright, Jonathan H & Yogo, Motohiro, 2002. "A Survey of Weak Instruments and Weak Identification in Generalized Method of Moments," Journal of Business & Economic Statistics, American Statistical Association, vol. 20(4), pages 518-529, October.
    32. Samuel H. Preston, 1996. "American Longevity: Past, Present, and Future," Center for Policy Research Policy Briefs 7, Center for Policy Research, Maxwell School, Syracuse University.
    33. David M. Cutler & Grant Miller, 2006. "Water, Water Everywhere. Municipal Finance and Water Supply in American Cities," NBER Chapters, in: Corruption and Reform: Lessons from America's Economic History, pages 153-183, National Bureau of Economic Research, Inc.
    34. Anonymous, 1955. "World Health Organization," International Organization, Cambridge University Press, vol. 9(4), pages 561-564, November.
    35. Schultz, T. Paul & Tansel, Aysit, 1997. "Wage and labor supply effects of illness in Cote d'Ivoire and Ghana: instrumental variable estimates for days disabled," Journal of Development Economics, Elsevier, vol. 53(2), pages 251-286, August.
    36. Philippe Aghion & Steven Durlauf (ed.), 2005. "Handbook of Economic Growth," Handbook of Economic Growth, Elsevier, edition 1, volume 1, number 1.
    37. Quamrul H. Ashraf & Ashley Lester & David N. Weil, 2009. "When Does Improving Health Raise GDP?," NBER Chapters, in: NBER Macroeconomics Annual 2008, Volume 23, pages 157-204, National Bureau of Economic Research, Inc.
    38. Gallup, John L. & Sachs, Jeffrey D. & Mellinger, Andrew, "undated". "Geography and Economic Development," Instructional Stata datasets for econometrics geodata, Boston College Department of Economics.
    39. Anonymous, 1953. "World Health Organization," International Organization, Cambridge University Press, vol. 7(1), pages 149-151, February.
    40. Tommy Bengtsson & Cameron Campbell & James Z. Lee, 2004. "Life Under Pressure: Mortality and Living Standards in Europe and Asia, 1700-1900," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262025515.
    41. Nicola Persico & Andrew Postlewaite & Dan Silverman, 2004. "The Effect of Adolescent Experience on Labor Market Outcomes: The Case of Height," Journal of Political Economy, University of Chicago Press, vol. 112(5), pages 1019-1053, October.
    42. Richard A. Easterlin, 1980. "Population and Economic Change in Developing Countries," NBER Books, National Bureau of Economic Research, Inc, number east80-1.
    43. Eduardo Arriaga & Kingsley Davis, 1969. "The pattern of mortality change in Latin America," Demography, Springer;Population Association of America (PAA), vol. 6(3), pages 223-242, August.
    44. Samuel H. Preston, 1980. "Causes and Consequences of Mortality Declines in Less Developed Countries during the Twentieth Century," NBER Chapters, in: Population and Economic Change in Developing Countries, pages 289-360, National Bureau of Economic Research, Inc.
    45. Kalemli-Ozcan, Sebnem & Ryder, Harl E. & Weil, David N., 2000. "Mortality decline, human capital investment, and economic growth," Journal of Development Economics, Elsevier, vol. 62(1), pages 1-23, June.
    46. repec:pri:cheawb:deaton_healthglobalage.pdf is not listed on IDEAS
    47. Masters, William A & McMillan, Margaret S, 2001. "Climate and Scale in Economic Growth," Journal of Economic Growth, Springer, vol. 6(3), pages 167-186, September.
    48. Maddison, Angus, 1992. " A Long-Run Perspective on Saving," Scandinavian Journal of Economics, Wiley Blackwell, vol. 94(2), pages 181-196.
    49. Kelley, Allen C, 1988. "Economic Consequences of Population Change in the Third World," Journal of Economic Literature, American Economic Association, vol. 26(4), pages 1685-1728, December.
    50. Anonymous, 1954. "World Health Organization," International Organization, Cambridge University Press, vol. 8(3), pages 394-398, August.
    51. John Luke Gallup & Jeffrey D. Sachs & Andrew D. Mellinger, 1998. "Geography and Economic Development," NBER Working Papers 6849, National Bureau of Economic Research, Inc.
    52. Anonymous, 1950. "World Health Organization," International Organization, Cambridge University Press, vol. 4(1), pages 144-145, February.
    53. Daron Acemoglu & Simon Johnson & James Robinson, 2003. "Disease and Development in Historical Perspective," Journal of the European Economic Association, MIT Press, vol. 1(2-3), pages 397-405, 04/05.
    54. Anonymous, 1953. "World Health Organization," International Organization, Cambridge University Press, vol. 7(4), pages 592-594, November.
    55. John Luke Gallup & Jeffrey D. Sachs & Andrew Mellinger, 1999. "Geography and Economic Development," CID Working Papers 01A, Center for International Development at Harvard University.
    56. T. Paul Schultz, 2002. "Wage Gains Associated with Height as a Form of Health Human Capital," American Economic Review, American Economic Association, vol. 92(2), pages 349-353, May.
    57. Alwyn Young, 2005. "The Gift of the Dying: The Tragedy of AIDS and the Welfare of Future African Generations," The Quarterly Journal of Economics, Oxford University Press, vol. 120(2), pages 423-466.
    58. Gallup, John & Sachs, Jeffrey, 1999. "Geography and Economic Development," Harvard Institute for International Development (HIID) Papers 294434, Harvard University, Kennedy School of Government.
    59. Robert W. Fogel, 1986. "Nutrition and the Decline in Mortality since 1700: Some Preliminary Findings," NBER Chapters, in: Long-Term Factors in American Economic Growth, pages 439-556, National Bureau of Economic Research, Inc.
    60. Edward Miguel & Michael Kremer, 2004. "Worms: Identifying Impacts on Education and Health in the Presence of Treatment Externalities," Econometrica, Econometric Society, vol. 72(1), pages 159-217, January.
    61. David N. Weil & Oded Galor, 2000. "Population, Technology, and Growth: From Malthusian Stagnation to the Demographic Transition and Beyond," American Economic Review, American Economic Association, vol. 90(4), pages 806-828, September.
    62. Felicia Marie Knaul & Edmundo Murrugarra & Carlos Hernández Alvarez & Rafael Cortez & William D. Savedoff & Jaime Espinosa Ferrando & Rocío Ribero Medina & Martín Valdivia & T. Paul Schultz & Jairo Nú, 2000. "Wealth from Health: Linking Social Investments to Earnings in Latin America," IDB Publications (Books), Inter-American Development Bank, number 42218 edited by William D. Savedoff & T. Paul Schultz, February.
    63. Anonymous, 1955. "World Health Organization," International Organization, Cambridge University Press, vol. 9(1), pages 178-181, February.
    64. David Cutler & Grant Miller, 2005. "The role of public health improvements in health advances: The twentieth-century United States," Demography, Springer;Population Association of America (PAA), vol. 42(1), pages 1-22, February.
    65. Hoyt Bleakley, 2003. "Disease and Development: Evidence from the American South," Journal of the European Economic Association, MIT Press, vol. 1(2-3), pages 376-386, 04/05.
    66. Jay Mandle, 1970. "The decline in mortality in British Guiana, 1911-1960," Demography, Springer;Population Association of America (PAA), vol. 7(3), pages 301-315, August.
    67. Easterlin, Richard A., 1999. "How beneficent is the market? A look at the modern history of mortality," European Review of Economic History, Cambridge University Press, vol. 3(3), pages 257-294, December.
    68. Anonymous, 1950. "World Health Organization," International Organization, Cambridge University Press, vol. 4(2), pages 327-330, May.
    69. Anonymous, 1956. "World Health Organization," International Organization, Cambridge University Press, vol. 10(1), pages 206-209, February.
    70. Jere R. Behrman & Mark R. Rosenzweig, 2004. "Returns to Birthweight," The Review of Economics and Statistics, MIT Press, vol. 86(2), pages 586-601, May.
    71. Knaul, Felicia Marie & Murrugarra, Edmundo & Hernández Alvarez, Carlos & Cortez, Rafael & Savedoff, William D. & Espinosa Ferrando, Jaime & Ribero Medina, Rocío & Valdivia, Martín & Schultz, T. Paul &, 2011. "Wealth from Health: Linking Social Investments to Earnings in Latin America," IDB Publications (Books), Inter-American Development Bank, number 321.
    72. Stanley L. Engerman & Robert E. Gallman, 1986. "Long-Term Factors in American Economic Growth," NBER Books, National Bureau of Economic Research, Inc, number enge86-1.
    73. Anonymous, 1947. "World Health Organization," International Organization, Cambridge University Press, vol. 1(3), pages 535-537, September.
    74. Hoyt Bleakley, 2007. "Disease and Development: Evidence from Hookworm Eradication in the American South," The Quarterly Journal of Economics, Oxford University Press, vol. 122(1), pages 73-117.
    75. Anonymous, 1954. "World Health Organization," International Organization, Cambridge University Press, vol. 8(4), pages 586-588, November.
    76. Manuel Arellano & Stephen Bond, 1991. "Some Tests of Specification for Panel Data: Monte Carlo Evidence and an Application to Employment Equations," Review of Economic Studies, Oxford University Press, vol. 58(2), pages 277-297.
    77. Anonymous, 1947. "International Office of Public Health," International Organization, Cambridge University Press, vol. 1(1), pages 146-146, February.
    78. Anonymous, 1954. "World Health Organization," International Organization, Cambridge University Press, vol. 8(2), pages 270-273, May.
    79. Anderson, T. W. & Hsiao, Cheng, 1982. "Formulation and estimation of dynamic models using panel data," Journal of Econometrics, Elsevier, vol. 18(1), pages 47-82, January.
    80. C Arndt & J D Lewis, 2000. "The Macro Implications of HIV/AIDS in South Africa: A Preliminary Assessment," South African Journal of Economics, Economic Society of South Africa, vol. 68(5), pages 380-392, December.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Schultz, T. Paul, 2010. "Population and Health Policies," Handbook of Development Economics, in: Dani Rodrik & Mark Rosenzweig (ed.), Handbook of Development Economics, edition 1, volume 5, chapter 0, pages 4785-4881, Elsevier.
    2. Gallardo-Albarrán, Daniel, 2018. "Health and economic development since 1900," Economics & Human Biology, Elsevier, vol. 31(C), pages 228-237.
    3. Weil, David N., 2014. "Health and Economic Growth," Handbook of Economic Growth, in: Philippe Aghion & Steven Durlauf (ed.), Handbook of Economic Growth, edition 1, volume 2, chapter 3, pages 623-682, Elsevier.
    4. Grosse, Scott, 1993. "Schistosomiasis And Water Resources Development: A Re-Evaluation Of An Important Environment-Health Linkage," Working Papers 11881, Environmental and Natural Resources Policy Training Project.
    5. Sambit Bhattacharyya, 2009. "Root Causes of African Underdevelopment," Journal of African Economies, Centre for the Study of African Economies (CSAE), vol. 18(5), pages 745-780, November.
    6. Matteo Cervellati & Uwe Sunde, 2011. "Life expectancy and economic growth: the role of the demographic transition," Journal of Economic Growth, Springer, vol. 16(2), pages 99-133, June.
    7. Bloom, David E. & Canning, David & Kotschy, Rainer & Prettner, Klaus & Schünemann, Johannes, 2018. "Health and Economic Growth: Reconciling the Micro and Macro Evidence," IZA Discussion Papers 11940, Institute of Labor Economics (IZA).
    8. Dora L. Costa, 2015. "Health and the Economy in the United States from 1750 to the Present," Journal of Economic Literature, American Economic Association, vol. 53(3), pages 503-570, September.
    9. Chakraborty, Shankha & Papageorgiou, Chris & Pérez Sebastián, Fidel, 2010. "Diseases, infection dynamics, and development," Journal of Monetary Economics, Elsevier, vol. 57(7), pages 859-872, October.
    10. Belgi Turan, 2020. "Life expectancy and economic development: Evidence from microdata," Review of Development Economics, Wiley Blackwell, vol. 24(3), pages 949-972, August.
    11. Madsen, Jakob B., 2016. "Barriers to Prosperity: Parasitic and Infectious Diseases, IQ, and Economic Development," World Development, Elsevier, vol. 78(C), pages 172-187.
    12. Bloom, David E. & Kuhn, Michael & Prettner, Klaus, 2018. "Health and Economic Growth," IZA Discussion Papers 11939, Institute of Labor Economics (IZA).
    13. Moshe Hazan & Hosny Zoabi, 2006. "Does longevity cause growth? A theoretical critique," Journal of Economic Growth, Springer, vol. 11(4), pages 363-376, December.
    14. Peter Lorentzen & John McMillan & Romain Wacziarg, 2008. "Death and development," Journal of Economic Growth, Springer, vol. 13(2), pages 81-124, June.
    15. Husain, Muhammad Jami, 2010. "Contribution of health to economic development: A survey and overview," Economics - The Open-Access, Open-Assessment E-Journal (2007-2020), Kiel Institute for the World Economy (IfW Kiel), vol. 4, pages 1-52.
    16. Martine AUDIBERT & Pascale COMBES MOTEL & Alassane DRABO, 2010. "Global Burden of Disease and Economic Growth," Working Papers 201036, CERDI.
    17. Sambit Bhattacharyya, 2011. "Growth Miracles and Growth Debacles," Books, Edward Elgar Publishing, number 13609.
    18. Grimm, M., 2010. "Does inequality in health impede growth?," ISS Working Papers - General Series 19426, International Institute of Social Studies of Erasmus University Rotterdam (ISS), The Hague.
    19. Javier Birchenall, 2007. "Escaping high mortality," Journal of Economic Growth, Springer, vol. 12(4), pages 351-387, December.
    20. Flückiger, Matthias & Ludwig, Markus, 2017. "Malaria suitability, urbanization and persistence: Evidence from China over more than 2000 years," European Economic Review, Elsevier, vol. 92(C), pages 146-160.

    More about this item

    JEL classification:

    • I10 - Health, Education, and Welfare - - Health - - - General
    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General
    • J11 - Labor and Demographic Economics - - Demographic Economics - - - Demographic Trends, Macroeconomic Effects, and Forecasts

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:nbr:nberwo:12269. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: . General contact details of provider: https://edirc.repec.org/data/nberrus.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (email available below). General contact details of provider: https://edirc.repec.org/data/nberrus.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.