Life Expectancy and Economic Growth: The Role of The Demographic Transition

This paper investigates the hypothesis that the causal effect of life expectancy on income per capita growth is non-monotonic. This hypothesis follows from the recent literature on unified growth, in which the demographic transition represents an important turning point for population dynamics and hence plays a central role for the transition from stagnation to growth. Results from different empirical specifications and identification strategies document that the effect is non-monotonic, negative (but often insignificant) before the onset of the demographic transition, but strongly positive after its onset. The results provide a new interpretation of the contradictory existing evidence and have relevant policy implications.