Does early-life health enhance growth? Evidence from Spain

C Blázquez-Fernández,D Cantarero-Prieto,P Perez-Gonzalez,J Llorca-Díaz

doi:10.1080/13504851.2014.982851

Abstract

This article focuses on the causal effect of early-life health on economic growth for the Spanish regions over the period 1980–2007. The hypothesis follows from recent literature, in which mortality affects growth by diminishing incentives for behaviour with short-run costs and long-run pay-offs. We provide empirical evidence that higher infant mortality has a direct negative impact on per capita income growth. Also, that a greater risk of early-life death is associated with losses on accumulation of both physical and human capital, and fertility gains, which in turn more even reduces growth.

Highlights

The correlation between health capital and economic growth has been traditionally seen as a causal link in only one direction: wealth allows better access to food, investments in health care or education
It should be noted that extended life may result in an increase in working years, while enhancing the quality of life may boost the per capita income each year of life
This paper examines the hypothesis of causal effect of early-life health on economic growth for the Spanish regions over the period 1980-2007

Summary

Introduction

The correlation between health capital and economic growth has been traditionally seen as a causal link in only one direction: wealth allows better access to food, investments in health care or education. In recent years a sizeable body of research has addressed the reverse causation, i.e. healthy populations increase labour productivity and per capita income (Cooray, 2013). In this context, there is little research on the health-related growth in countries of southern Europe, let alone on regions which exhibit less extraneous variation than those. The aim of this paper is to analyse the growth effects of early-life health for the 17 Spanish regions over the period 1980-2007. As far as we are concerned it is among the first to disentangle the health-related growth for the Spanish regions, when using infant mortality as a proxy for health.

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Conclusion