On the Rise of Health Spending and Longevity

Raquel Fonseca (), Pierre-Carl Michaud, Titus Galama and Arie Kapteyn

No WR-722, Working Papers from RAND Corporation

Abstract: The authors use a calibrated stochastic life-cycle model of endogenous health spending, asset accumulation and retirement to investigate the causes behind the increase in health spending and life expectancy over the period 1965-2005. They estimate that technological change along with the increase in the generosity of health insurance may explain independently 53% of the rise in health spending (insurance 29% and technology 24%) while income less than 10%. By simultaneously occurring over this period, these changes may have lead to a ?synergy? or interaction effect which helps explain an additional 37% increase in health spending. They estimate that technological change, taking the form of increased productivity at an annual rate of 1.8%, explains 59% of the rise in life expectancy at age 50 over this period while insurance and income explain less than 10

Keywords: demand for health; health spending; insurance; technological change; longevity (search for similar items in EconPapers)
JEL-codes: I10 I38 J26 (search for similar items in EconPapers)
Pages: 50
Date: 2009-12
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (39)

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Working Paper: On The Rise of Health Spending and Longevity (2009)
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