GDP versus Life Expectancy: A short analysis of six countries
Most people expect that as GDP rises, so does life expectancy. This is the prevailing thinking. The question is is this always the case? And just how much longer can we expect to live as GDP goes up? By taking a look at six different countries across the globe, we will be able to see how rising GDP affects average life expectancy.
For this analysis, I have used data from six countries around the globe: Chile, China, Germany, Mexico, the United States and Zimbabwe. The time period in the data is from 2000 to 2015 and measures annual GDP and life expectancy at birth. Setting aside precise definitions of developed, developing or emerging economies, it is safe to say that all of these countries have experienced some level of industrialization and modernization albeit at different times, and have various sectors and industries contributing to economic output.
Zimbabwe, for instance, is mineral rich and has one of the most highly developed industrial sectors in Africa going back as far a 1990¹. Chile is a highly competitive economy and has a vast agricultural sector including logging, mining, forestry, and produces food like asparagus and grapes for export². The Chinese economic miracle is well known and documented; the GDP data since 2000 only further supports their meteoric rise. Germany flourished thanks to the Marshal Plan and America has spearheaded the world economy since then. Mexico stands on solid economic ground.
With just a basic understanding of each countries’ economic history, does life expectancy rise as GDP does? The answer from the data is a definitive yes. But not as much as you might expect.
Looking at life expectancy in the chart below, we can see that the overall trend is up. In all countries except Zimbabwe, we see only a modest change over that 15 year period. Germany had the highest life expectancy for all of the years. Mexico was higher than China in 2000, but China had caught up by 2015. Chile experienced some minor fluctuations while still staying slightly ahead of the US. This may be surprising given that the size of the Chilean economy compared with the American economy. All mostly saw steady upward gains with some small dips along the way.
On the other hand, the trajectory for Zimbabwe look very different. It had a prominent decrease in life expectancy until 2004, but then saw a fast increase from 2005 to 2011. It continued to increase until 2015. The country experienced an increase of almost 15 years over a ten year period. This is the exception in the data with no other country experiencing such numbers.
These changes coincided with similar changes in GDP. A contributing factor was the fact that the country went through a period of political instability during the Mugabe years. The country participated in a war in the Democratic Republic of Congo from 1998 to 2003 draining economy resources and experienced a period of hyperinflation from 2003 to April 2009³. It also suffered foot shortages in 2001 and 2002 relying on food aid from foreign countries.⁴ These factors most likely caused the decrease in life expectancy and GDP. The country seemed to get back on track after the 2008 elections with the country under new leadership.
Let’s look the GDP data where for Zimbabwe, we can see the dramatic increase in GDP starting in 2008. The economy increased more than three-fold from then until 2015, from under 5 billion (B) to over 16B. It had been flat or in decline before 2008. The numbers can be seen in the bottom right chart (all amounts are in USD).
Chile’s economy quadrupled overall during this time period while experiencing some decreases along the way. China had the most dramatic increase with a GDP just over 1 trillion (T) in 2000 to almost 12T in 2015. It become the second largest economy in the world. Mexico and Germany had some similar ups and downs with both economies roughly doubling. The US marched upward and only saw a decrease in GDP in the year of the Lehman Shock. It is interesting that only China did not drop in GDP during the 2008 world economic crisis.
We see economic growth across the board as well as growth in life expectancy. Now, let’s see how they correlate.
Because of a large gap in the magnitudes in GDP, the correlation charts for GDP versus life expectancy have been shown on a logarithmic scale. With the transformation, you can clearly see the overall upward trend in each country.
You can also see how Chile, Germany and the US (green, orange, and blue) have higher life expectancies than the other three countries with minimum over 75. To be precise, the boundary is from the US at 76.8. China and Mexico reach this group at a maximum, with Mexico slightly ahead of China (76.7 and 76.1 respectively). Zimbabwe is in a category of its own. This was seen in the charts earlier. The other interesting observation from the logarithmic chart is to be able to see the levels of GDP clearly. You can easily observe how China started in 2000 with an economy the size of Mexico in 2015, and ended in 2015 having an economy the size of the US economy in 2000, all the while surpassing Germany along the way. The more spread out the scatter plots are, the larger the GDP growth in relative terms. Mexico and Germany saw the least amount of growth in terms of relative change from the year 2000.
The trends for the correlation can be seen better individually. Since we know the overall trend is positive, I charted the data using polynomial regression in order to capture the rate of change of the growth in terms of GDP and not time. Most had a variation of an s-curve where life expectancy growth in terms of GDP is faster up to a point and then the growth starts to level out. This is best exemplified in Germany and Zimbabwe, which itself at the end of the leveling out period looks to start another period of stronger growth. China had the fastest growth of life expectancy in terms GDP and Zimbabwe the largest.
Note that the rate of change is scaled relative to each economies’ range of life expectancies. Since the vertical axis is not ordered by time, we can see similar GDP numbers with different life expectancies: some above and some below the trend. Still, as GDP tends to drift up, so does life expectancy. Therefore, we can conclude that we are living longer in relative terms.
How much exactley?
For seven of the eight countries, the average range in change of life expectancy is exactly three years. That means that over the course of the 15 years, with minor fluctuations in life expectancy at similar GDP levels, the overall upward trend resulted in people living longer by 3 years on average. The big exception is Zimbabwe, which had an overall change of 16.4 years. In 2004, Zimbabweans expected to live to around 44 years in 2004 but to 60 years in 2015. That is a phenomenal increase in life expectancy.
Since all trended up, it goes to show that as long as economies are generally growing, so will the average life expectancy. This goes for economies at different ages of maturity. I think the overall trend shows that being apart of the modern world, no matter the scale or age of maturity of an economy, increases life expectancy.
I speculate that the driving force behind the increase is better health care and education. Even if an economy is still in the developing or emerging phase with possible periods of economic dips, the overall health standards seem to be increasing. This is what the data is telling us. This is probably due to better hospitals, more knowledgable medical field workers, a more educated and aware populous, better food distribution systems, and more advanced infrastructure. Of course, this is just speculation on my part since the data here is limited to only the two measures in this analysis: GDP and life expectancy.
To see what is really going on, we need more data.
- Stonemason, Colin. “The Industrialization of Zimbabwe — Past, Present and Future.” https://openjournals.ugent.be/af/article/61014/galley/185419/view/
- https://www.worldatlas.com/articles/what-are-the-biggest-industries-in-chile.html
- https://www.synergiafoundation.org/insights/analyses-assessments/economic-crisis-zimbabwe
- https://www.reuters.com/article/us-zimbabwe-inflation-idUSL1992587420070919
