The Effect of Life Expectancy on Fertility, Saving, Schooling and Economic Growth: Theory and Evidence*

TLDR

The study builds a simple growth model to analyze how uncertain survival shapes schooling, consumption, and fertility choices. The model assumes agents with uncertain survival determine their schooling duration, life‑cycle consumption, and number of children. The analysis finds that rising longevity reduces fertility but raises saving, schooling time and growth at a diminishing rate, with cross‑country data supporting positive effects on saving, secondary enrollment and growth and a negative effect on fertility, though the saving‑rate effect is less conclusive.

Abstract

Abstract We construct a simple growth model where agents with uncertain survival choose schooling time, life‐cycle consumption and the number of children. We show that rising longevity reduces fertility but raises saving, schooling time and the growth rate at a diminishing rate. Cross‐section analyses using data from 76 countries support these propositions: life expectancy has a significant positive effect on the saving rate, secondary school enrollment and growth but a significant negative effect on fertility. Through sensitivity analyses, the effect on the saving rate is inconclusive, while the effects on the other variables are robust and consistent. These estimated effects are decreasing in life expectancy.