Technology, Institutions, and Longevity: An Empirical Analysis of AI Investment and Life Expectancy in the OECD

Abstract

This paper discusses factors that influence life expectancy at birth in the discussion of countries belonging to the Organization of Economic Cooperation and Development, particularly the significance of investment in artificial intelligence (AI). Based on Grossman's (1972) health capital theory, the conventional socioeconomic variables are included in the analysis along with national gross domestic product (GDP) per capita, out-of-pocket healthcare expenditure, and quality of governance, alongside emerging factors like the adoption of artificial intelligence (AI) and internet penetration level. Drawing on the information of 25 of these containing a total of 226 observations, the paper uses the data of this 2012-2024 panel for the 25 economies contained in the Organization for Economic Cooperation and Development, and the method of generalized method of moment is applied to realize the endogenous, the problem of measurement error and the problem of dynamic at health resources. The results are congruent with life expectancy being cumulative in that lagged outcomes have a significant positive relationship with outcomes. The results include quality of institutions and digital access, and government quality and internet penetration as good positive factors in increasing the longevity: Contrary to expectations, AI investment has a negative and statistically significant effect on life expectancy, which indicates the observed lag in the potential gains of AI adoption and suggests the presence of concentration of gains in transitional phases of health system transformation. Similarly, out-of-pocket spending for health and gross domestic product (GDP) per capita per person have significant but positive effects with statistically insignificant differences, suggesting that union per capita wealth and private investment in health are not, in and of themselves, sufficient to assure population health. Overall, the findings underscore the importance of good governance and digital connectivity, and the complexity and magnitude of deploying AI in healthcare systems.