Understanding the Economic Consequences of Shifting Trends in Population Health

Pierre-Carl Michaud, Dana Goldman, Darius Lakdawalla, Y. Zheng and A. Gailey

Social and Economic Dimensions of an Aging Population Research Papers from McMaster University

Abstract: The public economic 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 microsimulation approach, 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 (including Social Security and income assistance). Together, the reduction in smoking and the rise in obesity have increased net public-sector liabilities by $430bn, or approximately 4% of the current debt burden. Larger effects are observed for specific public programs: annual spending is 10% higher in the Medicaid program, and 7% higher for Medicare.

Keywords: disability; health care costs; social security; microsimulation (search for similar items in EconPapers)
JEL-codes: I10 I38 J26 (search for similar items in EconPapers)
Pages: 51 pages
Date: 2009-09
New Economics Papers: this item is included in nep-hea
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (7)

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Related works:
Working Paper: Understanding the Economic Consequences of Shifting Trends in Population Health (2009)
Working Paper: Understanding the Economic Consequences of Shifting Trends in Population Health (2009)
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