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International Differences in Longevity and Health and Their Economic Consequences

Author

Listed:
  • Michaud, Pierre-Carl

    (HEC Montreal)

  • Goldman, Dana P.

    (RAND)

  • Lakdawalla, Darius N.

    (RAND)

  • Zheng, Yuhui

    (RAND)

  • Gailey, Adam H.

    (RAND)

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.

Suggested Citation

  • Michaud, Pierre-Carl & Goldman, Dana P. & Lakdawalla, Darius N. & Zheng, Yuhui & Gailey, Adam H., 2009. "International Differences in Longevity and Health and Their Economic Consequences," IZA Discussion Papers 4367, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp4367
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    References listed on IDEAS

    as
    1. Tatiana Andreyeva & Pierre-Carl Michaud & Arthur Van Soest, 2005. "Obesity and Health in Europeans Ages 50 and Above," Working Papers WR-331, RAND Corporation.
    2. Darius Lakdawalla & Tomas Philipson, 2002. "The Growth of Obesity and Technological Change: A Theoretical and Empirical Examination," Working Papers 0203, Harris School of Public Policy Studies, University of Chicago.
    3. Viscusi, W Kip & Aldy, Joseph E, 2003. "The Value of a Statistical Life: A Critical Review of Market Estimates throughout the World," Journal of Risk and Uncertainty, Springer, vol. 27(1), pages 5-76, August.
    4. Arie Kapteyn & Pierre-Carl Michaud & James P. Smith & Arthur Van Soest, 2006. "Effects of Attrition and Non-Response in the Health and Retirement Study," Working Papers WR-407, RAND Corporation.
    5. Samuel Preston & Haidong Wang, 2006. "Sex mortality differences in The United States: The role of cohort smoking patterns," Demography, Springer;Population Association of America (PAA), vol. 43(4), pages 631-646, November.
    6. Michaud, Pierre-Carl & Goldman, Dana P. & Lakdawalla, Darius N. & Zheng, Yuhui & Gailey, Adam H., 2009. "Understanding the Economic Consequences of Shifting Trends in Population Health," IZA Discussion Papers 4366, Institute of Labor Economics (IZA).
    7. Peter Adams & Michael D. Hurd & Daniel L. McFadden & Angela Merrill & Tiago Ribeiro, 2004. "Healthy, Wealthy, and Wise? Tests for Direct Causal Paths between Health and Socioeconomic Status," NBER Chapters, in: Perspectives on the Economics of Aging, pages 415-526, National Bureau of Economic Research, Inc.
    8. Kapteyn, Arie & Michaud, Pierre-Carl & Smith, James P. & van Soest, Arthur, 2006. "Effects of Attrition and Non-Response in the Health and Retirement Study," IZA Discussion Papers 2246, Institute for the Study of Labor (IZA).
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    10. Hilary W. Hoynes & Michael D. Hurd & Harish Chand, 1998. "Household Wealth of the Elderly under Alternative Imputation Procedures," NBER Chapters, in: Inquiries in the Economics of Aging, pages 229-257, National Bureau of Economic Research, Inc.
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    13. David M. Cutler & Edward L. Glaeser, 2009. "Why Do Europeans Smoke More than Americans?," NBER Chapters, in: Developments in the Economics of Aging, pages 255-282, National Bureau of Economic Research, Inc.
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    15. repec:reg:rpubli:282 is not listed on IDEAS
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    1. Longevity and the cost of health
      by Economic Logician in Economic Logic on 2009-10-30 19:51:00

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    Cited by:

    1. Samuel H. Preston & Jessica Y. Ho, 2009. "Low Life Expectancy in the United States: Is the Health Care System at Fault?," NBER Working Papers 15213, National Bureau of Economic Research, Inc.

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    More about this item

    Keywords

    international comparisons; mortality; disability; microsimulation;
    All these keywords.

    JEL classification:

    • I10 - Health, Education, and Welfare - - Health - - - General
    • I38 - Health, Education, and Welfare - - Welfare, Well-Being, 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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