The Role of Financial Development and Economic Misery on Life Expectancy: Evidence from Post Financial Reforms in India

This paper examines the impact of financial development and economic misery on life expectancy after the implementation of financial reforms in the case of Indian economy. Economic growth, education expenditure and rural–urban income inequality are included as additional determinants of life expectancy over the period of 1990QI–2013QIV. Our empirical findings from the combined cointegration approach confirm the long-run equilibrium relationship among life expectancy, economic growth, economic misery, education expenditure, financial development and rural–urban income inequality. Further, our results on the long-run impact suggest that financial development, economic growth and education expenditure have a significant and positive impact on life expectancy while economic misery and rural–urban income inequality have a substantial negative impact. Our findings offer a significant contribution to the policy and to the body of knowledge. Policy makers can formulate appropriate policies towards reducing rural–urban income inequality and economic misery so that life expectancy can further increase in India.