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The Technology of Birth: Is it Worth it?

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  • David M. Cutler
  • Ellen Meara

Abstract

We evaluate the costs and benefits of increased medical spending for low birth weight infants. Lifetime spending on low birth weight babies increased by roughly $40,000 per birth between 1950 and 1990. The health improvements resulting from this have been substantial. Infant mortality rates fell by 72 percent over this time period, largely due to improved care for premature births. Considering both length and quality of life, we estimate the rate of return for care of low birth weight infants at over 500 percent. Although prenatal care and influenza shots are more cost effective than neonatal care, this is significantly more cost effective than other recent innovations such as coronary artery bypass surgery, treatment of severe hypertension, or routine pap smears for women aged 20-74. We conclude that the answer to the question posed in this paper is a resounding 'Yes'.

Suggested Citation

  • David M. Cutler & Ellen Meara, 1999. "The Technology of Birth: Is it Worth it?," NBER Working Papers 7390, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:7390
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    References listed on IDEAS

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    1. Cutler, David M & Richardson, Elizabeth, 1998. "The Value of Health: 1970-1990," American Economic Review, American Economic Association, vol. 88(2), pages 97-100, May.
    2. David M. Cutler & Elizabeth Richardson, 1999. "Your Money and Your Life: The Value of Health and What Affects It," NBER Chapters, in: Frontiers in Health Policy Research, volume 2, pages 99-132, National Bureau of Economic Research, Inc.
    3. David M. Cutler & Ellen Meara, 1998. "The Medical Costs of the Young and Old: A Forty-Year Perspective," NBER Chapters, in: Frontiers in the Economics of Aging, pages 215-246, National Bureau of Economic Research, Inc.
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    JEL classification:

    • I1 - Health, Education, and Welfare - - Health

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