The Evolution of the Conditional Joint Distribution of Life Expectancy and per Capita Income Growth

In this paper we investigate the joint conditional distribution of health (life expectancy) and income growth, and its evolution over time. The conditional distributions of these two variables are obtained by applying non-parametric methods to a bivariate non-parametric regression system of equations. Analyzing the distributions of the non-parametric fitted values from these models we find strong evidence of movement over time and strong evidence of first-order stochastic dominance of the earlier years over the later ones. We also find strong evidence of second-order stochastic dominance by non-OECD countries over OECD countries in each period. Our results complement the findings of Wu, Savvides and Stengos (2008) who explored the unconditional behaviour of these joint distributions over time. Nonparametric Econometric Methods Advances in Econometrics, Volume 25, 171–191 Copyright r 2009 by Emerald Group Publishing Limited All rights of reproduction in any form reserved ISSN: 0731-9053/doi:10.1108/S0731-9053(2009)0000025008