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On the Rise of Health Spending and Longevity

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  • Raquel Fonseca

    ()

  • Pierre-Carl Michaud

    ()

  • Titus Galama
  • Arie Kapteyn

    ()

Abstract

The authors use a calibrated stochastic life-cycle model of endogenous health spending, asset accumulation and retirement to investigate the causes behind the increase in health spending and life expectancy over the period 1965-2005. They estimate that technological change along with the increase in the generosity of health insurance may explain independently 53% of the rise in health spending (insurance 29% and technology 24%) while income less than 10%. By simultaneously occurring over this period, these changes may have lead to a "synergy" or interaction effect which helps explain an additional 37% increase in health spending. They estimate that technological change, taking the form of increased productivity at an annual rate of 1.8%, explains 59% of the rise in life expectancy at age 50 over this period while insurance and income explain less than 10%.

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Bibliographic Info

Paper provided by RAND Corporation Publications Department in its series Working Papers with number 722.

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Length: 50 pages
Date of creation: Dec 2009
Date of revision:
Handle: RePEc:ran:wpaper:722

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Keywords: demand for health; health spending; insurance; technological change; longevity;

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As found by EconAcademics.org, the blog aggregator for Economics research:
  1. On The Rise of Health Spending and Longevity
    by Ariel Goldring in Free Market Mojo on 2010-01-25 09:00:20
Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
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Cited by:
  1. Banks, James & Muriel, Alastair & Smith, James P., 2010. "Disease Prevalence, Disease Incidence, and Mortality in the United States and in England," IZA Discussion Papers 4992, Institute for the Study of Labor (IZA).
  2. John Karl Scholz & Ananth Seshadri, 2010. "Health and Wealth in a Life Cycle Model," Working Papers wp224, University of Michigan, Michigan Retirement Research Center.
  3. He, Hui & Huang, Kevin X. D. & Hung, Sheng-Ti, 2014. "Are Recessions Good for Your Health? When Ruhm Meets GHH," Dynare Working Papers 31, CEPREMAP.
  4. Mariacristina De Nardi & Eric French & John Bailey Jones, 2012. "Medicaid insurance in old age," Working Paper Series WP-2012-13, Federal Reserve Bank of Chicago.
  5. Hui He & Hao Zhang & Tim Halliday, 2010. "Health Investment over the Life-Cycle," 2010 Meeting Papers 1179, Society for Economic Dynamics.
  6. Titus J. Galama & Hans van Kippersluis, 2013. "Health Inequalities through the Lens of Health Capital Theory: Issues, Solutions, and Future Directions," Tinbergen Institute Discussion Papers 13-076/V, Tinbergen Institute.
  7. John Karl Scholz & Ananth Seshadri, 2012. "The Interplay of Wealth, Retirement Decisions, Policy and Economic Shocks," Working Papers wp271, University of Michigan, Michigan Retirement Research Center.
  8. Juergen Jung & Chung Tran, 2008. "The Macroeconomics of Health Savings Accounts," Caepr Working Papers 2007-023, Center for Applied Economics and Policy Research, Economics Department, Indiana University Bloomington.
  9. John Karl Scholz & Ananth Seshadri, 2013. "Health Insurance and Retirement Decisions," Working Papers wp292, University of Michigan, Michigan Retirement Research Center.
  10. Mariacristina De Nardi & Eric French & John Bailey Jones, 2010. "The Effects of Medicaid and Medicare Reforms on the Elderly’s Savings and Medical Expenditures," Working Papers wp236, University of Michigan, Michigan Retirement Research Center.
  11. Chung Tran & Juergen Jung, 2011. "Market Inefficiency, Insurance Mandate and Welfare: U.S. Health Care Reform 2010," ANU Working Papers in Economics and Econometrics 2011-539, Australian National University, College of Business and Economics, School of Economics.
  12. Hui He & Kevin x.d. Huang, 2013. "Why Do Americans Spend So Much More on Health Care than Europeans?--A General Equilibrium Macroeconomic Analysis," Vanderbilt University Department of Economics Working Papers 13-00005, Vanderbilt University Department of Economics.
  13. John Karl Scholz & Ananth Seshadri, 2011. "The Influence of Public Policy on Health, Wealth and Mortality," Working Papers wp252, University of Michigan, Michigan Retirement Research Center.
  14. Kevin X. D. Huang & Hui He, 2013. "Why Do Americans Spend So Much More on Health Care than Europeans?," Vanderbilt University Department of Economics Working Papers 13-00021, Vanderbilt University Department of Economics.

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