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International Differences in Longevity and Health and their Economic Consequences

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Author Info
Pierre-Carl Michaud
Dana Goldman
Darius Lakdawalla
Adam Gailey
Yuhui Zheng

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Abstract

In 1975, 50 year-old Americans could expect to live slightly longer than their European counterparts. By 2005, American life expectancy at that age has diverged substantially compared to Europe. We find that this growing longevity gap is primarily the symptom of real declines in the health of near-elderly Americans, relative to their European peers. In particular, we use a microsimulation approach to project what US longevity would look like, if US health trends approximated those in Europe. We find that differences in health can explain most of the growing gap in remaining life expectancy. In addition, we quantify the public finance consequences of this deterioration in health. The model predicts that gradually moving American cohorts to the health status enjoyed by Europeans could save up to $1.1 trillion in discounted total health expenditures from 2004 to 2050.

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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 15235.

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Date of creation: Aug 2009
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Handle: RePEc:nbr:nberwo:15235

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Find related papers by JEL classification:
I10 - Health, Education, and Welfare - - Health - - - General
I38 - Health, Education, and Welfare - - Welfare and Poverty - - - Government Programs; Provision and Effects of Welfare Programs
J26 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Retirement; Retirement Policies

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This page was last updated on 2009-11-25.

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