Relationship between GDP, Life Expectancy and Growth Rate of G7 Countries

Abstract

Increase in life expectancy is a key indicator to gauge the economic development of a country. Enormous studies have been done to test this hypothesis, and the conclusion is still un-decided. This study aims to explore the impact of life expectancy on economic growth in G7 countries via regression approach. Keeping in view the unique population structure of each of these G7 countries, the trend of life expectancy for each country is also observed. Findings of the study indicate that life expectancy in G7 countries increases with constant rate. The increase in life expectancy is accompanied with the increase in Gross Domestic Product (GDP) per capita income. We have also included the population growth rate as another important factor contributing towards GDP. It is worth mentioning here that increase in life expectancy directly affects per capita real income due to higher expenditure on health. Moreover, it is also found that increase in GDP lessens the population growth.