Health Care in Developing Nations Labor Economics

Decreased Mortality leads to increased investment in Education

Economists predict that longer life expectancy leads to more investment in education. For those who live a short time, sacrificing working years for education is not worthwhile if the payback period is short. For those with a longer life expectancy, an individual can reap the monetary rewards from education over a longer period of time.

An NBER working paper by Seema Jayachandran looks at a what happens to educational investment after there was a 70% reduction in maternal mortality risk in Sri Lanka. The decreased maternal mortality rate was due to a number of factors: an increase in the number of hospitals, clinics and health centers, an increase in the number of trained birth attendants, transportation improvements such as free ambulances, and increased adoption of western technologies such as sulfa drugs and penicillin. Further, there was significant success in eradicating malaria during this time. Also, most of the medical services were provided for free.

Jayachandran uses a difference-in-difference-in-difference (DDD) strategy. “The first difference is over time, since maternal mortality fell between 1946 and 1953. The second difference is across geographic areas; the magnitude of the MMR declines varied considerably across Sri Lanka’s 19 districts. The third difference is between genders; maternal mortality is quite unique among major causes of death in that it exclusively pertains to women.”

The results of the study are that the decline in “…maternal mortality risk over the sample period increased female life expectancy at age 15 by 4.1%, female literacy by 2.5%, and female years of education by 4.0%.”

  • Seema Jayachandran (2008) “Life Expectancy and Human Capital Investments: Evidence From Maternal Mortality Declines” NBER WP #13947.


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