DP5246 Death and Development
|Author(s):||Peter L. Lorentzen, John McMillan, Romain Wacziarg|
|Publication Date:||September 2005|
|Keyword(s):||fertility, growth, human capital, investment, mortality|
|JEL(s):||I10, J10, O10|
|Programme Areas:||Institutions and Economic Performance|
|Link to this Page:||cepr.org/active/publications/discussion_papers/dp.php?dpno=5246|
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 behaviour, 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. In our regressions, adult mortality explains almost all of Africa's growth tragedy. Our analysis also underscores grim forecasts of the long-run economic costs of the ongoing AIDS epidemic.