International Differences in Longevity and Health and Their Economic Consequences

37 Pages Posted: 18 Aug 2009

See all articles by Pierre-Carl Michaud

Pierre-Carl Michaud

University of Quebec at Montreal (UQAM) - Department of Economics; Centre Interuniversitaire sur le Risque, les Politiques Economiques et l'Emploi (CIRPÉE); RAND Corporation, Labor and Population; IZA Institute of Labor Economics; Netspar

Dana P. Goldman

RAND Corporation; National Bureau of Economic Research (NBER)

Darius N. Lakdawalla

University of Southern California - Schaeffer Center for Health Policy and Economics; RAND Corporation; National Bureau of Economic Research (NBER)

Yuhui Zheng

RAND Corporation

Adam Gailey

RAND Corporation

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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.

Keywords: disability, mortality, international comparisons, microsimulation

JEL Classification: I10, I38, J26

Suggested Citation

Michaud, Pierre-Carl and Goldman, Dana P. and Lakdawalla, Darius N. and Zheng, Yuhui and Gailey, Adam, International Differences in Longevity and Health and Their Economic Consequences. IZA Discussion Paper No. 4367. Available at SSRN: https://ssrn.com/abstract=1455529

Pierre-Carl Michaud (Contact Author)

University of Quebec at Montreal (UQAM) - Department of Economics ( email )

P.O. Box 8888, Downtown Station
Montreal, Quebec H3C 3P8
Canada

Centre Interuniversitaire sur le Risque, les Politiques Economiques et l'Emploi (CIRPÉE) ( email )

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RAND Corporation, Labor and Population ( email )

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IZA Institute of Labor Economics ( email )

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Netspar ( email )

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Dana P. Goldman

RAND Corporation ( email )

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National Bureau of Economic Research (NBER) ( email )

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Darius N. Lakdawalla

University of Southern California - Schaeffer Center for Health Policy and Economics ( email )

635 Downey Way
Los Angeles, CA 90089-3333
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RAND Corporation ( email )

P.O. Box 2138
1700 Main Street
Santa Monica, CA 90407-2138
United States

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Yuhui Zheng

RAND Corporation ( email )

1776 Main Street
P.O. Box 2138
Santa Monica, CA 90407-2138
United States

Adam Gailey

RAND Corporation ( email )

1776 Main Street
P.O. Box 2138
Santa Monica, CA 90407-2138
United States

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