life expectancy schooling and lifetime labor supply theory and evidence revisited 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 or 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 u s men born between 1840 and 1930 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 publication abstract

endogenous lifetime and economic growth abstract endogenous mortality is introduced in a two period overlapping generations model probability of surviving from the first period to the next depends upon health capital that is augmented through public investment high mortality societies do not grow fast since shorter lifespans discourage savings development traps are possible productivity differences across nations result in persistent differences in capital output ratios and relatively larger gaps in income and mortality high mortality also reduces returns on education where risks are undiversifiable when human capital drives economic growth countries differing in health capital do not converge to similar living standards threshold effects may also result

the quantity and quality of life and the evolution of world inequality gdp per capita is usually used to proxy for the quality of life of individuals living in different countries welfare is also affected by quantity of life however as represented by longevity this paper incorporates longevity into an overall assessment of the evolution of cross country inequality and shows that it is quantitatively important the absence of reduction in cross country inequality up to the 1990s documented in previous work is in stark contrast to the reduction in inequality after incorporating gains in longevity throughout the post world war ii period health contributed to reduce significantly welfare inequality across countries this paper derives valuation formulas for infra marginal changes in longevity and computes a full growth rate that incorporates the gains in health experienced by 96 countries for the period between 1960 and 2000 incorporating longevity gains changes traditional results countries starting with lower income tended to grow faster than countries starting with higher income we estimate an average yearly growth in full income of 4 1 percent for the poorest 50 percent of countries in 1960 of which 1 7 percentage points are due to health as opposed to a growth of 2 6 percent for the richest 50 percent of countries of which only 0 4 percentage points are due to health additionally we decompose changes in life expectancy into changes attributable to 13 broad groups of causes of death and three age groups we show that mortality from infectious respiratory and digestive diseases congenital perinatal and ill defined conditions mostly concentrated before age 20 and between ages 20 and 50 is responsible for most of the reduction in life expectancy inequality at the same time the recent effect of aids together with reductions in mortality after age 50 due to nervous system senses organs heart and circulatory diseases contributed to increase health inequality across countries

intergenerational transfers as social insurance abstract in an overlapping generations model with stochastic population changes a social security scheme with a fixed level of payments to the retired can be interpreted as providing social insurance against the risks of demographic change

life expectancy and human capital investments evidence from maternal mortality declines longer life expectancy should encourage human capital accumulation since a longer time horizon increases the value of investments that pay out over time previous work has been unable to determine the empirical importance of this life expectancy effect due to the difficulty of isolating it from other effects of health on education we examine a sudden drop in maternal mortality risk in sri lanka between 1946 and 1953 which creates a sharp increase in life expectancy for school age girls without contemporaneous effects on health and which also allows for the use of boys as a control group using additional geographic variation we find that the 70 reduction in maternal mortality risk over the sample period increased female life expectancy at age 15 by 4 1 female literacy by 2 5 and female years of education by 4 0 authors

rising longevity education savings and growth this paper examines the impact of declines in adult mortality on growth in an overlapping generations model with public education and imperfect annuity markets a decline in mortality affects growth through three channels first it raises the saving rate and thereby increases the rate of physical capital accumulation second it reduces accidental bequests lowers investment and thereby lowers the rate of physical capital accumulation third it may lead the median voter to increase the tax rate for public education initially but lower the tax rate in a later stage starting from a high mortality rate as found in many third world populations the net effect of a decline in mortality is to raise the growth rate however starting from a low mortality rate such as is found in most industrial populations the net effect of a further decline in mortality is to reduce the growth rate the findings appear consistent with recent empirical evidence

mortality reductions educational attainment and fertility choice this paper develops a model where reductions in mortality are the main force behind economic development the model generates a pattern of changes similar to the demographic transition where gains in life expectancy at birth are followed by reductions in fertility and increases in the rate of human capital accumulation the onset of the transition is characterized by a critical level of life expectancy at birth which marks the movement of the economy from a malthusian equilibrium to an equilibrium with investments in human capital and the possibility of long run growth

disease and development the effect of life expectancy on economic growth we exploit the major international health improvements from the 1940s to estimate the effect of life expectancy on economic performance we construct predicted mortality using preintervention mortality rates from various diseases and dates of global interventions predicted mortality has a large impact on changes in life expectancy starting in 1940 but no effect before 1940 using predicted mortality as an instrument we find that a 1 percent increase in life expectancy leads to a 1 7 2 percent increase in population life expectancy has a much smaller effect on total gdp however consequently there is no evidence that the large increase in life expectancy raised income per capita

disease and development evidence from hookworm eradication in the american south this study evaluates the economic consequences of the successful eradication of hookworm disease from the american south the hookworm eradication campaign c 1910 began soon after i the discovery that a variety of health problems among southerners could be attributed to the disease and ii the donation by john d rockefeller of a substantial sum to the effort the rockefeller sanitary commission rsc surveyed infection rates in the affected areas eleven southern states and found that an average of forty percent of school aged children were infected with hookworm the rsc then sponsored treatment and education campaigns across the region follow up studies indicate that this campaign substantially reduced hookworm disease almost immediately the sudden introduction of this treatment combines with the cross area differences in pre treatment infection rates to form the basis of the identification strategy areas with higher levels of hookworm infection prior to the rsc experienced greater increases in school enrollment attendance and literacy after the intervention this result is robust to controlling for a variety of alternative factors including differential trends across areas changing crop prices shifts in certain educational and health policies and the effect of malaria eradication no significant contemporaneous results are found for adults who should have benefited less from the intervention owing to their substantially lower prior infection rates a long term follow up of affected cohorts indicates a substantial gain in income that coincided with exposure to hookworm eradication i also find evidence that eradication increased the return to schooling

mortality risk and human capital investment the impact of hiv aids in sub saharan africa abstract over the past several decades the hiv aids epidemic has dramatically altered patterns of morbidity and mortality in sub saharan africa with potential consequences for human capital investment and economic growth using data from demographic and health surveys for fifteen countries in sub saharan africa i estimate the relationship between regional hiv prevalence and the change in individual human capital investment over time consistent with a simple model of human capital investment incorporating mortality risk i find that areas with higher levels of hiv experienced relatively larger declines in schooling

regret in repeat purchase versus switching decisions the attenuating role of decision justifiability the decision making literature has consistently reported that decisions to maintain the status quo tend to be regretted less than decisions to change it we examine the consequences of repeat purchasing maintaining the status quo versus switching in the context of information regarding the reason for the decision e g prior consumption episode brand history and we argue that there are situations in which repeat purchasing may cause as much or even more regret than switching we contend that this effect depends on whether or not there is a justifiable basis for the decision in a series of four studies we show that if there is sufficient motivation to warrant a switch consumers will feel less regret in the face of a subsequent negative outcome realized via a switch than in one realized via a repeat purchase our results imply that feelings of regret are mitigated when the consumer reflects and concludes that the decision was appropriate under the circumstances

the gift of the dying the tragedy of aids and the welfare of future african generations this paper simulates the impact of the aids epidemic on future living standards in south africa i emphasize two competing effects on the one hand the epidemic is likely to have a detrimental impact on the human capital accumulation of orphaned children on the other hand widespread community infection lowers fertility both directly through a reduction in the willingness to engage in unprotected sexual activity and indirectly by increasing the scarcity of labor and the value of a woman s time i find that even with the most pessimistic assumptions concerning reductions in educational attainment the fertility effect dominates the aids epidemic on net enhances the future per capita consumption possibilities of the south african economy

limited life expectancy human capital and health investments human capital theory predicts that life expectancy will impact human capital attainment we estimate this relationship using variation in life expectancy driven by huntington disease an inherited neurological disorder we compare investments for individuals who have ex ante identical risks of hd but differ in disease realization individuals with the hd mutation complete less education and job training the elasticity of demand for college attendance with respect to life expectancy is around 1 0 we relate this to cross country and over time differences in education we use smoking and cancer screening data to test the corollary that health capital responds to life expectancy

fertility restrictions and life cycle outcomes evidence from the one child policy in china this study considers the experience of china s one child policy to examine how fertility restrictions affect economic and social outcomes over a lifetime using variations in these penalties across

life expectancy and human capital evidence from the international epidemiological transition exploiting preintervention variation in mortality from various infectious diseases together with the time variation arising from medical breakthroughs in the late 1940s and the 1950s this study examines how a large positive shock to life expectancy influenced the formation of human capital within countries during the second half of the 20th century the results establish that the rise in life expectancy was behind a significant part of the increase in human capital over this period according to the baseline estimate for one additional year of life expectancy years of schooling increase by 0 17 year moreover the evidence suggests that declines in pneumonia mortality are the underlying cause of this finding indicating that improved childhood health increases human capital investments

mortality decline human capital investment and economic growth abstract we examine the role of increased life expectancy in raising human capital investment during the process of economic growth we develop a continuous time overlapping generations model in which individuals make optimal schooling investment choices in the face of a constant probability of death we present analytic results followed by results from a calibrated version of the model using realistic estimates of the return to schooling mortality decline produces economically significant increases in schooling and consumption allowing schooling to vary endogenously produces a much larger response of consumption and capital to mortality decline than is observed when schooling is held fixed

the effect of health on economic growth a production function approach abstract we estimate a production function model of aggregate economic growth including two variables that microeconomists have identified as fundamental components of human capital work experience and health our main result is that good health has a positive sizable and statistically significant effect on aggregate output even when we control for experience of the workforce we argue that the life expectancy effect in growth regressions appears to be a real labor productivity effect and is not the result of life expectancy acting as a proxy for worker experience

the white black educational gap stalled progress and the long term consequences of the emergence of crack cocaine markets abstract we propose the rise of crack cocaine markets as a key explanation for the end to the convergence in black white educational outcomes in the united states that began in the mid 1980s after constructing a measure to date the arrival of crack markets in cities and states we show that the decline in educational outcomes for black males begins with the start of the crack epidemic we also show that there are higher murder and incarceration rates after the arrival of crack cocaine and that these are predictive of lower black high school completion rates a result consistent with human capital theory we estimate that effects related to crack markets can account for approximately 40 to 70 of the fall in black male high school completion rates

education lifetime labor supply and longevity improvements this paper presents an analysis of the differential role of mortality for the optimal schooling and retirement age when the accumulation of human capital follows the so called ben porath mechanism we set up a life cycle model of consumption and labor supply at the extensive margin that allows for endogenous human capital formation this paper makes two important contributions first we provide the conditions under which a decrease in mortality leads to a longer education period and an earlier retirement age second those conditions are decomposed into a ben porath mechanism and a lifetime human wealth effect vs the years to consume effect finally using us and swedish data for cohorts born between 1890 and 2000 we show that our model can match the empirical evidence

longevity complementarities under competing risks many of the high expenditure health programs established by international organizations or national and subnational governments involve disease specific interventions such as measles vaccinations hiv education programs mammogram screening malaria prevention and lung cancer research typically these programs are evaluated solely upon the success or failure of their impact on the targeted disease this paper argues that such an exclusive evaluation may significantly underestimate the overall effect of disease specific interventions when multiple risks act as competing forces on life we suggest that programs that target one disease may have important spillover effects on the mortality and morbidity of other causes of death in order to better understand and evaluate the overall effects of disease specific programs it is necessary to understand and measure these spillover effects this paper provides a theoretical and empirical analysis of the incentives introduced by disease specific mortality interventions more precisely we discuss predictions about health investment incentives as implied by the competing risk model which is the empirical framework almost exclusively used to study multiple cause mortality we show that important complementary effects between niultiple causes of death operate to equalize the occurrence of the causes we argue that this complementarity should alter the evaluation of cause specific interventions by discrediting the argument that interventions are wasted because competing mortality risks are just around the corner in support of the existence of such complementarities we present substantive evidence from one of the most important public health programs ever introduced in developing countries the expanded programme on immunization epi of the united nations the paper is organized as follows section i provides a theoretical analysis arguing that the competing risk model of multiple causes of mortality corresponds to the leontief production function of survival this implies that there are inherent complementarities between investments in the prevention of cause specific mortality risks both on the individual level and on the aggregate level for competing risks the marginal benefit of investing to avoid one cause of death increases as a function of the survival rates of other causes the implications of this complementarity are important and have not received sufficient attention in theoretical or practical evaluations of causespecific interventions when mortality is treated as exogenous a disease specific intervention may seem wasteful if members of the targeted group are likely to die from a second cause as soon as the first has been eliminated then reducing the mortality from one cause of death would not appear to substantially increase life expectancy indeed this argument is repeatedly made by economists and demographers about medical care interventions in old age however it is sguided to use the preintervention background mortality when assessing the effectiveness of an interventionbehavior under one policy should not be assumed to prevail under a new policy as the leontief nature of competing risks predicts health investments will be focused upon he most immediate cause of death so that there are dow department of health policy and administration cb 7400 university of north carolina chapel hill nc 27599 philipson irving b harris graduate school of public policy studies department of economics and the law school university of chicago 1155 east 60th street chicago il 60637 sala i martin department of econornics columbia university 420 west 118th street 1005 new york ny 10027 and universitat pompeu fabra we are thankful to three anonymous referees for comments that substantially improved the paper and we especially acknowledge the contributions of jessica holmes who was a research assistant and co author on early drafts of this work we also thank gary becker kate howe steen jorgenson casey mulligan sherwin rosen paul schultz and participants at numerous workshops for discussions dow acknowledges financial support from national institute on aging grant no t32 ag00244 philipson from the national science foundation and the rockefeller foundation this research was begun while all authors were at yale university during 1994

life expectancy and endogenous growth we consider an overlapping generations model with uncertain lifetime and endogenous growth individuals have to choose the length of time devoted to schooling before starting to work we show that it depends positively on life expectancy but that the positive effect of a longer life on growth could be offset by a decrease in the participation rate dynamics are characterized by a delay differential equation and human capital converges with oscillations to a balanced growth path

strategic interactions among private and public efforts when preventing and stamping out a highly infectious animal disease upon the outbreak of a contagious animal disease a primary motive for restoring disease free status is often to regain access to international product markets efforts applied toward continuing or regaining such access generate a public good all growers benefit regardless of the extent of private effort taken while exclusion is impractical private incentives to take preventive measures and stamp out effort interact in complex ways there are intra farm temporal interactions and also inter farm contemporaneous interactions public effort also takes place and interacts with private effort this paper provides a succinct multi agent model to explore these interactions in social optimum and in nash equilibrium and also to explore how socially optimal and nash behavior differ comparative statics under social optimality are more straightforward than under nash equilibrium whether it is in social optimum or nash equilibrium public prevention effort complements both private prevention and private stamp out efforts however public stamp out effort substitutes for both private stamp out and private prevention efforts reasonable conditions are identified under which nash levels of private prevention and stamp out efforts are both below socially optimal levels concerning policy prescriptions secure property rights and low property transfer costs should promote prevention and eradication efforts other things being equal public prevention effort should be more effective at improving welfare than comparable public stamp out effort subsidies on private effort should favor prevention because subsidies on eradication effort may discourage prevention effort even if products from diseased animals are safe to consume and acceptable to consumers it may be optimal to destroy them

longevity and lifetime labor supply evidence and implications conventional wisdom suggests that increased life expectancy had a key role in causing a rise in investment in human capital i incorporate the retirement decision into a version of ben porath s 1967 model and find that a necessary condition for this causal relationship to hold is that increased life expectancy will also increase lifetime labor supply i then show that this condition does not hold for american men born between 1840 and 1970 and for the american population born between 1890 and 1970 the data suggest similar patterns in western europe i end by discussing the implications of my findings for the debate on the fundamental causes of long run growth

accounting for the effect of health on economic growth i use microeconomic estimates of the effect of health on individual outcomes to construct macroeconomic estimates of the proximate effect of health on gdp per capita i employ a variety of methods to construct estimates of the return to health which i combine with cross country and historical data on height adult survival rates and age at menarche using my preferred estimate eliminating health differences among countries would reduce the variance of log gdp per worker by 9 9 percent and reduce the ratio of gdp per worker at the 90th percentile to gdp per worker at the loth percentile from 20 5 to 17 9 while this effect is economically significant it is also substantially smaller than estimates of the effect of health on economic growth that are derived from cross country regressions