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Tag Archives: life expectancy

Industries afflicted with Baumol's Disease have slower productivity growth.

It might be tough to use statistics to judge US health care.

Among OECD countries (Organization for Economic Cooperation and Development), from 1980 to 1999, for life expectancy, the US ranked #19 and Canada was #5. However, the order flips–US #1 and Canada #4–once you exclude fatal injuries like auto accidents, suicides and murder.

Similarly, the US has had a higher infant mortality rate than Canada. The reason, though, could relate to our higher incidence of teenage pregnancies. Teenagers tend to give birth to babies with a higher mortality rate because of their lower birth weights.

You see where this is going. If a candidate defends his healthcare policy by referring to a health outcome like life expectancy or infant mortality rates, we need to be sure that the statistic actually reflects our healthcare system and not another characteristic of our society. And it even gets more complicated because we could say that we have 3 healthcare systems: Medicaid, Medicare and private insurance with a fourth on the way when statewide healthcare exchanges begin.

On which statistics would you base your your policy preferences for the US healthcare system? Or maybe we should just remember what Benjamin Disraeli (1804-1881), British Prime Minister under Queen Victoria said:

“There are three kinds of lies: lies, damned lies, and statistics.”

Election Economics Topics:

 

Sources: In this 2007 NY Times column, Harvard professor N. Gregory Mankiw looks “Beyond Those Health Care Numbers” while I also referred to this Forbes article and this econtalk podcast on misleading healthcare system statistics. Finally, for a perspective that takes us away from the stats and to the bigger ideas that are driving this election, do look at what Princeton economist Uwe Reinhardt says in his NY Times economix.com articles.

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Using data for 2009 from death certificates in all 50 states, the national Centers for Disease Control has concluded that we are living longer. A male infant’s projected life span has risen .2 years to 75.7 while a female infant’s life expectancy is up .1 years to 80.6. An interesting chart in the report notes projected longevity for ages 0-100. Females at age 100 are estimated as having 2.2 years left. 65-year old males have a projected life span of 82.3.

Living longer, though, means that Social Security will need more money unless changes are made. Proposals from the deficit commission appointed by President Obama include the following (pp. 48-53):

  • Gradually increase the age that we start to receive Social Security benefits.
  • Gradually increase Social Security taxes.
  • Decrease what higher earners receive.
  • Encourage more personal retirement saving.

The Economic Lesson

The future of Social Security takes us to two basic concerns.

  1. Life expectancy: When Social Security was created in 1935, the average lifespan was 64 and benefits could begin at age 65. Now, life expectancy can extend beyond 80.
  2. Ratio of workers to beneficiaries: Called pay-as-you-go, the Social Security system has current workers funding retirees’ benefits. Because of the baby boomers, the worker/retiree ratio is plunging. In 1950 there were 16 workers for every beneficiary and now it is 3:1. The projection for 2025 is a ratio of 2.3 workers for every retiree.

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