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International Differences in Longevity and Health and their Economic Consequences

Author

Listed:
  • P.-C. Michaud
  • D. Goldman
  • D. Lakdawalla
  • A. Gailey
  • Y. Zheng

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

  • P.-C. Michaud & D. Goldman & D. Lakdawalla & A. Gailey & Y. Zheng, 2009. "International Differences in Longevity and Health and their Economic Consequences," Social and Economic Dimensions of an Aging Population Research Papers 254, McMaster University.
    • Handle: RePEc:mcm:sedapp:254
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    References listed on IDEAS

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    1. 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.
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    14. repec:reg:rpubli:282 is not listed on IDEAS
    15. 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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    As found by EconAcademics.org, the blog aggregator for Economics research:
    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

    disability; mortality; international comparisons; 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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