Economic growth is good for your health
A prosperous world is not just good for your wallet, but also good for your health.
This bears repeating, especially given that in certain circles, it is popular not only to sing the praises of economic stagnation, but to call for an outright shrinking of the economy — a generalized impoverishment, as it were.
If we look at the data, though, there is a strong positive correlation between the wealth of nations and the life expectancy of their populations.
Without getting into long, complicated calculations, it should surprise no one that the Republic of Chad, with a Gross Domestic Product per capita of less than US$650 in 2020, has one of the lowest life expectancies in the world, at just 53 years, while Switzerland, with a GDP per capita of over US$85,000 in 2020, has one of the highest life expectancies, at 83 years.
In addition to the statistical observation that citizens of richer countries generally live longer, the data also supports the fact that the more a given economy grows, the more likely its citizens’ life expectancy will rise.
A good way of illustrating this is to observe the trajectories of the two Koreas following their separation in 1945. In 1950, the first post-partition year for which life expectancy data exist, North Koreans could expect to live to be 49.22 years old, while South Koreans could expect to live 46.62 years.
At the time, North Korea, having a more industrial economy, was richer than South Korea, which remained a largely agricultural economy. Although the North Korean regime is renowned for its lack of transparency, it is estimated that before the 1960s, its GDP per capita was anywhere from 30% to 50% higher than South Korea’s.
Today, South Koreans can expect to live to be 82.77 years old, whereas the life expectancy of North Koreans is 71.96 years. While South Korea was catching up to and surpassing North Korea in terms of longevity, the same thing was happening on the economic front. The GDP per capita of the former reached almost US$38,000 per person in 2018 (the most recent years for which data are available), while in the latter country, it remained much lower, at just under US$1,600 per person.
Even though life expectancy did increase in both countries, there is no question that South Korea has a much more impressive record.
One of the factors explaining the link between prosperity, growth and longevity is that of biopharmaceutical innovation.
As we all know, access to vaccination and medicine has transformed certain formerly deadly diseases into little more than nuisances today, as well as practically eradicating others thanks in part to extensive public health campaigns.
One study of the matter found that between 1986 and 2000, 40% of the life expectancy gains in the 52 countries examined were directly related to the development and marketing of new drugs.
Other studies looking specifically at the wealthiest countries find that the development of new drugs is responsible for a non-negligible portion of the reduction in mortality risks after the age of 65.
The resources needed to discover and develop new drugs, to test them and bring them to market, are very substantial. It is no surprise, then, that the most prosperous societies in the world are the ones that really have the means to do so, and therefore are the ones that spend the most money on pharmaceutical research and development.
The more our economy grows, the greater our ability to invest in life-saving and life-improving treatments and procedures, equipping ourselves with tools that enable us to live longer, healthier lives. That’s why, whatever the prophets of stagnation and degrowth may preach, economic growth really is very good for the health of each and every one of us.
Vincent Geloso is Senior Economist at the MEI and the author of “Why Economic Growth Is Good for Your Health.” The views reflected in this opinion piece are his own.