Returns to Longevity? The Effects of Life Expectancy on Labour Productivity in Singapore.

Abstract

While Singapore has consistently been at the forefront of global rankings when it comes to life expectancy and labour productivity, their relationship and interconnectedness are widely contentious. This paper attempts to specifically analyse whether life expectancy affects labour productivity through an instrumental variable approach using 2-Staged-Least-Sqaures (2SLS) regressions. I analyse the effects of life expectancy on labour productivity through multiple channels - education, savings, and the interaction between Malthusian effects and demographic transitions. While further controls must be considered to establish causality, this paper shows a positive association between life expectancy and labour productivity, shedding light that policy investments in health outcomes extend beyond demographic risk management to one which contemporaneously strengthens labour productivity.