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Andrew Price pointed me to an interesting paper on mortality (and, by extension, life expectancy) and economic growth, via Bradford Plumer.
Analyzing a variety of cross-national and sub-national data, we argue that high adult mortality reduces economic growth by shortening time horizons. Higher adult mortality is associated with increased levels of risky behavior, higher fertility, and lower investment in physical and human capital. Furthermore, the feedback effect from economic prosperity to better health care implies that mortality could be the source of a poverty trap.
I think that there are other factors at work in the African regions that are the focus of their paper, such as rapacious governance, absence of the rule of law, and so forth. Life expectancy and mortality in the economic boom times of the 18th century in Europe weren't much better than the worst of Africa today, after all. The basic concept is a good one, however, and we should turn it around and ask ourselves how much more economic growth could we experience if healthy life spans were greatly extended? I think it to be eminently sensible to view short-termism in the management of public companies, to pick one example, as a function of our life spans. Short-termism would still exist if we lived twice as long, but there is every reason to think that it would be lengthier short-termism, with less of the sacrifice of long term gains.
What long-term and potentially very profitable opportunities do we set aside because aging and death require us to hasten everything along - and because aging and death destroy more value than all the natural and man-made disasters worldwide each year? Now there is something to think on.
Technorati tags: economics, life extension
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Posted by Reason
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