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The Fiscal Consequences of Trends in Population Health

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

Abstract

The public burden of shifting trends in population health remains uncertain. Sustained increases in obesity, diabetes, and other diseases could reduce life expectancy — with a concomitant decrease in the public sector’s annuity burden — but these savings may be offset by worsening functional status which increases health care spending, reduces labor supply, and increases public assistance. Using a health microsimulation model, we quantify the competing public finance consequences of shifting trends in population health for medical care costs, labor supply, earnings, wealth, tax revenues, and government expenditures. We find that the trends in obesity and smoking have different fiscal consequences and that, because of its more profound effects on morbidity and health care expenditures, obesity represents a larger immediate risk from a fiscal perspective. Uncertainty in residual mortality improvements represents by far the largest risk.

Suggested Citation

  • Goldman, Dana & Michaud, Pierre-Carl & Lakdawalla, Darius & Zheng, Yuhui & Gailey, Adam & Vaynman, Igor, 2010. "The Fiscal Consequences of Trends in Population Health," National Tax Journal, National Tax Association;National Tax Journal, vol. 63(2), pages 307-330, June.
    • Handle: RePEc:ntj:journl:v:63:y:2010:i:2:p:307-30
    DOI: 10.17310/ntj.2010.2.07
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    Citations

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    Cited by:

    1. Pi Alperin, María Noel & Perquin, Magali & Giordana, Gastón A., 2024. "Population ageing and public finance burden of dementia: Micro-simulations evaluating risk factors, treatments and comorbidities in Luxembourg," The Journal of the Economics of Ageing, Elsevier, vol. 28(C).
    2. Vincenzo Atella & Federico Belotti & Daejung Kim & Dana Goldman & Tadeja Gracner & Andrea Piano Mortari & Bryan Tysinger, 2021. "The future of the elderly population health status: Filling a knowledge gap," Health Economics, John Wiley & Sons, Ltd., vol. 30(S1), pages 11-29, November.
    3. Daniel Bauer & Darius Lakdawalla & Julian Reif, 2018. "Mortality Risk, Insurance, and the Value of Life," NBER Working Papers 25055, National Bureau of Economic Research, Inc.
    4. Michaud, Pierre-Carl & Goldman, Dana P. & Lakdawalla, Darius N. & Zheng, Yuhui & Gailey, Adam H., 2012. "The value of medical and pharmaceutical interventions for reducing obesity," Journal of Health Economics, Elsevier, vol. 31(4), pages 630-643.
    5. Joachim Winter & Amelie Wuppermann, 2014. "Do They Know What Is At Risk? Health Risk Perception Among The Obese," Health Economics, John Wiley & Sons, Ltd., vol. 23(5), pages 564-585, May.
    6. Michaud, Pierre-Carl & Goldman, Dana & Lakdawalla, Darius & Gailey, Adam & Zheng, Yuhui, 2011. "Differences in health between Americans and Western Europeans: Effects on longevity and public finance," Social Science & Medicine, Elsevier, vol. 73(2), pages 254-263, July.
    7. Mark P. Connolly & Nikolaos Kotsopoulos & Aomesh Bhatt & Maarten J. Postma, 2019. "Sustainability of public finances: inclusion of unrelated medical cost only part of the story," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 20(8), pages 1281-1282, November.

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