Does higher longevity harm economic growth?

Abstract

Summary: This study contributes to economic growth literature by providing new evidence on the relationship between life expectancy and economic growth uti-lising the recently developed dynamic panel threshold estimator. The sample of this study contains a total of 112 developed and developing countries covering the period from 1981 to 2010. The findings indicate the existence of a non-linear relationship between life expectancy and economic growth. In particular, life expectancy is useful for economic growth but only up to a certain threshold level; any further increase in longevity above the threshold would adversely affect growth. These findings emphasise the role of demographic transition in explaining the relationship between health and economic growth.