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Life expectancy and human capital: New empirical evidence.


ABSTRACT: This paper re-examines a well-established hypothesis postulating that life expectancy augments incentives for human capital accumulation, leading to global income differences. A major distinguishing feature of the current study is to estimate heterogeneous panel data models under a common factor framework, which explicitly accounts for parameter heterogeneity, unobserved common factors (UCFs), and variables' non-stationarity. In sharp contrast to most previous studies, I find that the impact of health improvements on human capital accumulation turns out to be imprecisely estimated at conventionally accepted levels of statistical significance. I demonstrate that conventional estimates of the educational returns to rising longevity are derived from estimating misspecified models at least partially due to parameter heterogeneity and the presence of UCFs.

SUBMITTER: Vu TV 

PROVIDER: S-EPMC10092450 | biostudies-literature | 2023 Feb

REPOSITORIES: biostudies-literature

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Life expectancy and human capital: New empirical evidence.

Vu Trung V TV  

Health economics 20221031 2


This paper re-examines a well-established hypothesis postulating that life expectancy augments incentives for human capital accumulation, leading to global income differences. A major distinguishing feature of the current study is to estimate heterogeneous panel data models under a common factor framework, which explicitly accounts for parameter heterogeneity, unobserved common factors (UCFs), and variables' non-stationarity. In sharp contrast to most previous studies, I find that the impact of  ...[more]

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