Life expectancy and human capital investments: Evidence from maternal mortality declines in Sri Lanka

Many economists argue that high mortality is a major restraint on human capital accumulation and, in turn, growth. A short time horizon makes a person less likely to invest. Therefore, having a lower life expectancy reduces the incentive to obtain schooling. However, there is controversy over whether this theoretical effect is empirically important. Most previous research designs have been unable to isolate whether health improvements encourage human capital accumulation specifically via life-expectancy effects. This paper uses a type of mortality well-suited to this task. We examine maternal mortality declines in Sri Lanka between 1946 and 1963. Maternal mortality was a major killer of prime-age women, and its elimination (driven by improvements in availability of health care and transportation to hospitals at the time of delivery) resulted in large increases in the life expectancy of women relative to men in a very short period of time. We use variation across districts, over time and by gender to identify the effects of longevity on education and other outcomes. We find that the 80% reduction in maternal mortality risk increased female life expectancy by 1.7 years (a 4.5% increase in prime-age years), and increased female literacy by 7.2%. Lower maternal mortality risk also appears to have increased the birth rate. * [email protected]; [email protected]. We are grateful to seminar participants at Brown, HarvardBoston University-MIT, Minnesota, Penn, Princeton, and Stanford for helpful comments.