Health Improvement and Income Growth in the Long Run
Health Improvement and Income Growth in the Long Run
This chapter considers the stylized facts regarding the strong nexus between economic development and health, as reflected by the famous Preston curve. By providing a decomposition of the reasons for recent increases in life expectancy, in terms of increased income (shifts along the Preston curve) and shifts of the Preston Curve, the chapter questions whether third factors, such as institutions, are largely omitted factors in this context. While causality is likely to run both ways, the effect of life expectancy on income and income dynamics plays a key role for long-run development because a reduction in mortality rates and a corresponding increase in longevity affect the incentives to acquire human capital and invest in formal education.
Keywords: economic development, health, Preston curve, life expectancy, income, causality, mortality rates, human capital
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