- Open Access
Is there a Wealth Dividend of Aging Societies?
Public Health Reviews volume 32, pages377–400 (2010)
Apocalyptic views on the social, economic and health consequences of aging abound. This review examines the potential upside of aging, in particular from a public health perspective. First, we review the evidence on whether there is healthy aging in the sense of a compression of morbidity: people spending fewer of the life years gained in poor health. The evidence turns out to be decidedly mixed, depending on the country, the data and perhaps most critically on the definition of “health” considered. Second, we explore the potential and actual labour market impact a healthy elderly population could make. We find considerable support for the notion that if only effective retirement age was raised to reflect past and future increases in life expectancy, then the result could be a significant increase in elderly labour force participation rates. Moreover, a significant share of the already retired elderly population is in good health, indicating a potential unused capacity for the labour market. Third, we turn to the impact of improved health (especially among the elderly) on healthcare expenditures. In general, evidence does not support the optimistic expectation that improved health will mitigate or even reverse the trend of increasing health expenditures. Even if better health may, in some circumstances, lead to lower healthcare spending, other cost drivers, in particular technological advances, will more than outweigh any such expenditure-reducing effect. On the other hand, there is not much support for the hypothesis that better health by itself is a major cost driver. Policy can make a difference in facilitating the realisation of the potential benefits of a healthy aging scenario. This does, however, require a coordinated approach between social, economic and health policy and will enter into policy arenas in which the political costs of reform, despite their expected societal benefits, may become a bottleneck that is hard to overcome.
United Nations Population Division. World population ageing 1950–2050. New York (NY): United Nations; 2002.
World Bank. Averting the old age crisis. Washington (DC): World Bank; 1994.
Franco OH, Karnik K, Osborne G, Ordovas JM, Catt M, van der Ouderaa F. Changing course in ageing research: The healthy ageing phenotype. Maturitas. 2009;63:13–9.
Bowling A. Aspirations for older age in the 21st century: What is successful aging? Int J Aging Hum Dev. 2007;64:263–97.
Christensen K, Doblhammer G, Rau R, Vaupel JW. Ageing populations: The challenges ahead. Lancet. 2009;374:1196–208.
Knickman JR, Snell EK. The 2030 problem: caring for aging baby boomers. Health Serv Res. 2002;37:4.
Nordhaus W. The health of nations: The contribution of improved health to living standards. In: Murphy KM and Topel RH, editors. Exceptional returns: The value of medical research. Chicago (IL): University of Chicago Press; 2003 pp. 9–40.
Fries JF. Ageing, natural death, and the compression of morbidity. N Engl J Med. 1980;303:130–5.
Fries JF, Green LW, Levine S. Health promotion and the compression of morbidity. Lancet. 1989;i:481–3.
Fries JF. Measuring and monitoring success in compressing morbidity. Ann Intern Med. 2003;139:455–9.
Robine JM, Mathers CD. Measuring the compression or expansion of morbidity through changes in health expectancy. In: Robine JM, Mathers CD, Bone MR, et al., editors. Calculation of health expectancies: Harmonization, consensus achieved and future perspectives. Paris: INSERM/John Libbey Eurotext; 1993 pp. 269–86.
Grunenberg EM. The failure of success. Milbank Mem Fund Q Health Soc. 1977;55:3–24.
Kramer M. The rising pandemic of mental disorders and associated chronic diseases and disabilities. Acta Psychiatr Scand. 1980;62:282–97.
Manton KG. Changing concepts of morbidity and mortality in the elderly population. Milbank Mem Fund Q Health Soc. 1982;60:183–244.
Dormont B, Oliveira-Martins J, Pelgrin F, Suhrcke M. Health expenditure, longevity and growth. In: Garibaldi P, Oliveira-Martins J, van Ours J, editors. Ageing, health and productivity: The economics of increased life expectancy. Oxford (UK): Oxford University Press; in press.
Jagger C, Gillies C, Moscone F, Cambois E, Van Oyen H, Nusselder W, et al. Inequalities in healthy life years in the 25 countries of the European Union in 2005: A cross-national meta-regression analysis. Lancet. 2008;372:2124–31.
European health expectancy monitoring unit. Trends in disability-free life expectancy at age 65 in the European Union 1995–2001: A comparison of 13 EU countries. Ehemu Technical Report 2009_5.1. Ehemu; 2009.
Crimmins EM, Saito Y, Reynolds SL. Further evidence on recent trends in the prevalence and incidence of disability among older americans from two sources: The LSOA and the NHIS. J Gerontol. 1997;52B:S59–71.
Manton KG, Stallard E, Corder L. Changes in morbidity and chronic disability in the U.S. elderly population: Evidence from the 1982, 1984, and 1989 National Long Term Care Surveys. J Gerontol B Psychol Sci Soc Sci. 1995;50:S194–204.
Robine JM, Michel JP. Looking forward to a general theory on population aging. J Gerontol A Biol Sci Med Sci. 2004;59:M590–7.
Mayhew L. Increasing longevity and the economic value of healthy ageing and working longer. Cass business school city university report. Cass Business School: London (UK); 2009.
Philipson L. A rise in old-age longevity and the market for long term care. Am Econ Rev. 2002;92:295–306.
Bishop CE. 1999. Where are the missing elders? The decline in nursing home use, 1985 and 1995. Health Aff. 1999;18:146–55.
Sturm R, Ringel JS, Andreyeva T. Increasing obesity rates and disability trends. Health Aff. 2004;23:199–205.
Olshansky SJ, Passaro DJ, Hershow RC, Layden J, Carnes BA, Brody J, et al. A potential decline in life expectancy in the United States in the 21st century. N Eng J Med. 2005;352:1138–45.
Freedman VA, Martin LG, Schoeni RF, Cornman JC. Declines in late-life disability: The role of early- and mid-life factors. Soc Sci Med. 2008;66:1588–602.
University of Michigan. Health and Retirement study. Available from URL: http://hrsonline.isr.umich.edu/ (Accessed 3 March 2011)
Freedman VA, Martin LG, Schoeni RF. Recent trends in disability and functioning among older adults in the United States. A systematic review. JAMA. 2002;288:3137–46.
Manton KG, Corder L, Stallard E. Chronic disability trends in elderly United States populations: 1982–1994. Proc Nat Acad Sci U S A. 1997;94:2593–8.
Manton KG, Gu X. 2001. Changes in the prevalence of chronic disability in the United States black and nonblack population above age 65 from 1982 to 1999. Proc Nat Acad Sci U S A. 2001;98:6354–9.
Schoeni RF, Freedman VA, Martin LG. Why is late-life disability declining? Milbank Q. 2008;86:47–89.
Burniaux J-M, Duval R, Jaumotte F. Coping with ageing: A dynamic approach to quantify the impact of alternative policy options on future labour supply in OECD countries. Working Papers No. 371. Organisation for Economic Co-operation and Development (OECD): Paris; 2003.
Oliveira Martins J, Gonand F, Antolin P, de la Maisonneuve C, Yoo K-Y. The impact of ageing on demand, factor markets and growth. Economics Working Paper No. 420. Organisation for Economic Co-operation and Development (OECD): Paris; 2005.
Suhrcke M, Sauto Arce R, McKee M, Rocco L. The economic costs of ill health in the European Region. WHO Regional Office for Europe: Copenhagen; 2008.
Lievre A, Jusot F, Barnay T, Sermet C, Brouard N, Robine JM, et al. Healthy working life expectancies at age 50 in Europe: A new indicator. J Nutr Health Aging. 2007;11:508–14.
Eurostat. European Community Household Panel (ECHP). European Commission. Available from URL: http://epp.eurostat.ec.europa.eu/portal/page/portal/microdata/echp (Accessed 3 March 2011).
Börsch-Supan A, Brugiavini A, Croda E. The role of institutions and health in European patterns of work and retirement. J Eur Soc Policy. 2009;19:341–58.
Survey of Health, Ageing and Retirement in Europe. SHARE. Available from URL: http://www.share-project.org/ (Accessed 3 March 2011).
Angelini V, Brugiavini A, Weber G. Ageing and unused capacity in Europe: Is there an early retirement trap? Econ Policy. 2009;24:463–508.
Currie J, Madrian BC. Health, health insurance and the labor market. In: Ashenfelter O, Card D, editors. Handbook of labor economics, edition 1, volume 3. Elsevier; 1999. pp 3309–416.
Sammartino FJ. The effect of health on retirement. Soc Secur Bull. 1987;50:31–47.
Deschryvere M. Labour force behavior of elderly two adult households: Evidence from EU-countries. Discussion Papers 933. The Research Institute of the Finnish Economy. 2004.
Lindeboom M, van der Klaauw B, Llena-Nozal A. Disability and work: The role of health shocks and childhood circumstances. TI Discussion Paper No. 2006-039/3. 2006.
Gruber J, Wise D. Social Security, retirement incentives, and retirement behavior: An international perspective. EBRI Issue Brief. 1999;209:1–22.
Hagan R, Jones AM, Rice N. Health and retirement in Europe. J Environ Res Public Health. 2009;6:2676–95.
Kalwij A, Vermeulen F. Health and labour force participation of older people in Europe: What do objective health indicators add to the analysis? Health Econ. 2008;17:619–38.
Kerkhofs M, Lindeboom M, Theeuwes JJM. Retirement, financial incentives and health. Labour Econ. 1999;6:203–27.
Kerkhofs M, Lindeboom M. Subjective health measures and state dependent reporting errors. Health Econ. 2006;4:221–35.
Roberts J, Rice N, Schellhorn M, Jones A, Gambin L. Health, retirement and inequality: Can Germany and the United Kingdom learn from each other? Anglo German Foundation: London; 2006. Available from URL: http://www.shef.ac.uk/content/1/c6/07/08/73/AGF%20retirement%20project%20-%20Final%20Report.pdf (Accessed 16 March 2011).
Disney R, Emmerson C, Wakefield M. Ill health and retirement in Britain: A panel data-based analysis. J Health Econ. 2006;25:621–49.
Siddiqui S. The impact of health on retirement behaviour: Empirical evidence from West Germany. Health Econ. 1997;6:425–38.
Jiménez-Martín S, Labeaga, JM, Prieto CV. A sequential model of older workers’ labor force transitions after a health shock. Health Econ. 2006;15:1033–54.
Datta Gupta N, Larsen M. The impact of health on individual retirement plans: Self-reported versus diagnostic measures. Health Econ. 2010;19:792–813.
Wanless D. Securing our future health: Taking a long-term view. HM Treasury: London; 2002. Available from URL: http://www.hm-treasury.gov.uk/Consultations_and_legislation/wanless/consult_wanless_final.cfm (Accessed 5 May 2008).
Zweifel P, Steinmann L, Eugster P. The Sisyphus syndrome in health revisited. Int J Health Care Finance Econ. 2005;5:127–45.
Chernichovsky D, Markowitz S. Aging and aggregate costs of medical care: Conceptual and policy issues. Health Econ. 2004;13:543–62.
Fried TR, Bradley EH, Williams CS, Tinetti ME. Functional disability and health care expenditures for older persons. Arch Intern Med. 2001;161:2602–7.
Manton KG, Lowrimore GR, Ullian AD, Gu X, Tolley HD. Labor force participation and human capital increases in an aging population and implications for U.S. research investment. Proc Nat Acad Sci U S A. 2007;104:10802–7.
Dormont H, Grignon M, Huber H. Health expenditure growth: Reassessing the threat of ageing. Health Econ. 2006;15:947–63.
Thomas L. The lives of a cell: Notes of a biology watcher. New York (NY): Viking Press; 1975.
Weisbrod BA. The health care quadrilemma: An essay on technological change, insurance, quality of care, and cost containment. J Econ Lit. 1991;29:523–52.
Dybczak K, Przywara B. The role of technology in health care expenditure in the EU. European Economy, Economic Papers 400. European Commission: Brussels; 2010.
Liu K, Daviglus ML, Yan L. Cardiovascular disease (CVD) risk factor status earlier in adulthood and cumulative health care costs from age 65 to the point of death. Circulation. 2003;108:iv–722.
Shang B, Goldman D. Does age or life expectancy better predict health care expenditures? Health Econ. 2007;17:487–501.
van Baal PH, Polder JJ, de Wit GA, Hoogenveen RT, Feenstra TL, Boshuizen HC, et al. Lifetime medical costs of obesity: Prevention no cure for increasing health expenditure. PLoS Med. 2008;5:e29.
Mittendorf T. Are average cost figures correct in this context? Response to van Baal et al. PLoS Medicine, 2008. Available from URL: http://medicine.plosjournals.org/perlserv/?request=read-response&doi=10.1371/journal.pmed.0050029#r2109 (Accessed 5 May 2008).
Yang Z, Hall AG. The financial burden of overweight and obesity among elderly Americans: the dynamics of weight, longevity, and health care cost. Health Serv Res. 2008;43:849–68.
Lakdawalla DN, Goldman DP, Shang B. The health and cost consequences of obesity among the future elderly. Health Aff (Millwood). 2005;24:W5R30–41.
Goldman D, Cutler D, Shang B, Joyce G. The value of elderly disease prevention. Forum for Health Economics & Policy. 2006;9(2). Available from URL: http://www.bepress.com/fhep/biomedical_research/1 (Accessed 5 May 2008).
Sloan F, Ostermann J, Conover C, Taylor DH, Picone G. The price of smoking. Cambridge (MA) and London (UK): MIT Press; 2004.
Butland B, Jebb S, Kopelman P, McPherson K, Thomas S, Mardell J, Parry V. Tackling obesities: Future choices — Project report. London, Foresight; London (UK): 2007. Available from URL: http://www.foresight.gov.uk/Obesity/Obesity_final/Index.html (Accessed 5 May 2008).
Lubitz J, Cai L, Kramarow E, Lentzner H. Health. life expectancy, and health care spending among the elderly. N Eng J Med. 2003;349:1048–55.
Joyce GF, Keeler EB, Shang B, Goldman DP. The lifetime burden of chronic disease among the elderly. Health Aff (Millwood). 2005;24:W5R18–29.
U.S. Department of Health and Human Services. Medicare Current Beneficiary Survey (MCBS). DHHS, Centers for Medicare and Medicaid Services. Available from URL: https://www.cms.gov/LimitedDataSets/11_MCBS.asp#TopOfPage (Accessed 3 March 2011).
Goldman DP, Shang B, Bhattacharya J, Garber AM, Hurd M, Joyce GF, et al. Consequences of health trends and medical innovation for the future elderly. Health Aff (Millwood). 2005;24:W5R5–17.
Raitano M. The impact of death-related costs on health-care expenditure: A survey. Research Report No. 17. European Network of Economic Policy Research Institutes: Brussels; 2006. Available from URL: http://www.enepri.org/files/Publications/RR17.pdf (Accessed 5 May 2008).
Seshamani M, Gray A. Ageing and health-care expenditure: The red herring argument revisited. Health Econ. 2004;13:303–14.
Gandjour A, Lauterbach KW. Does prevention save costs? Considering deferral of the expensive last year of life. J Health Econ. 2005;24:715–24.
Daviglus ML, Liu K, Pirzada A, Yan LL, Garside DB, Greenland P, et al. Cardiovascular risk profile earlier in life and medicare costs in the last year of life. Arch Intern Med. 2005;165:1028–34.
Yang Z, Norton EC, Stearns SC. Longevity and health care expenditures: The real reasons older people spend more. J Gerontol B Psychol Sci Soc Sci. 2003;58:S2–10.
Spillman BC, Lubitz J. The effect of longevity on spending for acute and long-term care. N Eng J Med. 2000;342:1409–15.
Boeri T, Börsch-Supan A, Tabellini G. Would you like to reform the pension system? The opinions of European citizens. Am Econ Rev. 2002;92:396–401.
Recommended Citation: Suhrcke M, Fumagalli E, Hancock R. Is There a Wealth Dividend of Aging Societies? Public Health Reviews. 2010;32:377–400.