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2017 Documento de Trabajo #331

Longevity, Human Capital and Domestic Investment

This article explores the interaction between aggregate initial human capital, life expectancy and domestic investment. The article introduces a simple model that predicts that the positive effect of life expectancy on the domestic investment rate is mitigated in economies with a higher level of initial human capital. Using a large panel of countries over the past five decades, the article presents empirical evidence consistent with the main prediction of the model.

JEL Classification: E22; I15; J11; J24.

Francisco Parro
Francisco Szederkenyi
Patricio Valenzuela

Keywords: Domestic investment; Life expectancy; Human capital.