International Differences in Longevity and Health and Their Economic Consequences

36 Pages Posted: 21 Nov 2009

See all articles by Pierre-Carl Michaud

Pierre-Carl Michaud

RAND Corporation; IZA Institute of Labor Economics

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)

Adam Gailey

RAND Corporation

Yuhui Zheng

RAND Corporation

Date Written: June 1, 2009

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 Gailey, Adam and Zheng, Yuhui, International Differences in Longevity and Health and Their Economic Consequences (June 1, 2009). Netspar Discussion Paper No. 06/2009-021. Available at SSRN: https://ssrn.com/abstract=1509175 or http://dx.doi.org/10.2139/ssrn.1509175

Pierre-Carl Michaud (Contact Author)

RAND Corporation ( email )

1776 Main Street
Santa Monica, CA 90407-2138
United States

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

Dana P. Goldman

RAND Corporation ( email )

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

National Bureau of Economic Research (NBER) ( email )

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Darius N. Lakdawalla

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

635 Downey Way
Los Angeles, CA 90089-3333
United States

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

Adam Gailey

RAND Corporation ( email )

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

Yuhui Zheng

RAND Corporation ( email )

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

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