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International Differences in Longevity and Health and their Economic Consequences

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

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
Date of revision:
Publication status: published as Michaud, P.-C., D. Goldman, D. Lakdawalla, A. Gailey and Y. Zheng (2011): "Differences in Health between Americans and Western Europeans: Effects on Longevity and Public Finance", Social Science and Medicine 73:2, pp. 254-263.
Handle: RePEc:nbr:nberwo:15235
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  1. W. Kip Viscusi & Joseph E. Aldy, 2003. "The Value of a Statistical Life: A Critical Review of Market Estimates throughout the World," NBER Working Papers 9487, National Bureau of Economic Research, Inc.
  2. 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 for the Study of Labor (IZA).
  3. David M. Cutler & Edward L. Glaeser, 2006. "Why Do Europeans Smoke More than Americans?," NBER Working Papers 12124, National Bureau of Economic Research, Inc.
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  5. Darius Lakdawalla & Tomas Philipson, 2002. "The Growth of Obesity and Technological Change: A Theoretical and Empirical Examination," NBER Working Papers 8946, National Bureau of Economic Research, Inc.
  6. 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.
  7. 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 407, RAND Corporation.
  8. Rogers, Richard G. & Powell-Griner, Eve, 1991. "Life expectancies of cigarette smokers and nonsmokers in the United States," Social Science & Medicine, Elsevier, vol. 32(10), pages 1151-1159, January.
  9. Goldman Dana P & Cutler David M & Shang Baoping & Joyce Geoffrey F, 2006. "The Value of Elderly Disease Prevention," Forum for Health Economics & Policy, De Gruyter, vol. 9(2), pages 1-29, January.
  10. Andreyeva, T. & Michaud, P.C. & van Soest, A.H.O., 2007. "Obesity and health in Europeans age 50 and above," Other publications TiSEM ac9092fe-6dfa-4b99-8db8-9, Tilburg University, School of Economics and Management.
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