Does early-life health enhance growth? Evidence from Spain

Abstract

This article focuses on the causal effect of early-life health on economic growth for the Spanish regions over the period 1980–2007. The hypothesis follows from recent literature, in which mortality affects growth by diminishing incentives for behaviour with short-run costs and long-run pay-offs. We provide empirical evidence that higher infant mortality has a direct negative impact on per capita income growth. Also, that a greater risk of early-life death is associated with losses on accumulation of both physical and human capital, and fertility gains, which in turn more even reduces growth.

Keywords:

• growth
• infant mortality
• investment
• human capital
• fertility
• health power

JEL Classification:

• I10
• J10
• O10

Acknowledgement

C. Blázquez-Fernández wants to thank the Spanish Ministry of Education.

Notes

¹ With 14 870 and 7240 euros of per capita income (sample average) in Madrid and Extremadura, respectively, the convergence effect vehicles a catch-up of 0.05 × log (14 870/7240) = 3.9%.

² Being infant mortality 2 per thousand (time average for La Rioja) instead of 1.14 per thousand (the one for Balearic Islands), our GMM results imply a growth gap of −0.023 × log (2/1.14) = 1.3%.

Additional information

Funding

This work was partially supported by the Spanish Ministry of Education [grant number FPU AP-2012-04156].