The quality of life: age-specific mortality, the financing of health expenditures and economic growth
01 / 2008 - 01 / 2013
The challenge of this project lays on public and private health expenditures, also on the instantaneous probability of death, labour productivity, life expectancy, savings and all variables which are age-dependent. Models proposed allow to investigate a wide range of subjects, from demography and the underlying problems such as mortality to economic problems such as productivity of workers and the agents' consumption and savings behaviour. Two main problems are raised, the first one concerns the impact of public and private health spending on the economic growth in developed countries, but also problems generated by longer life expectancy. And the second one concerns what happened or could happen in the developing countries. Debate on health policy often focuses on limiting the growth of health spending, and calls for the question whether growth of health care is a rational response to changing economic conditions notably the growth of income per person as lifetime increases. Indeed, intuitions behind issues raised by age-dependent mortality in a more realistic modeling is crucial. Because people with different ages have different lifetimes, they will have different effective planning horizons, and notably different saving decisions. In the context of standard preferences (asset pricing, labour supply, etc.) widely used in economics to study consumption, the financing of health expenditures becomes an economic behaviour, the risk of which must be assessed. Moreover, in a general equilibrium perspective, the supply side of the economy can lead agents to trade-off between private and public insurance, or even a mixing of the two. The research project, building upon the topics of measuring and assessing risk, modelling the behaviour of economic agents in the face of risk, and health economics will clearly address these policy issues. The main objective of the proposal consist in determining: i) The optimal choices of public health policies, holding account the age structure of population, ii) The effects of a decrease in mortality benefiting young people and/or old people, iii) Revisiting the trade-off between expenditures in social services (health in particular) and expenditures in other public services, iv) The consequences on health expenditures and on the economy of shocks undermining the survival probability, v) The agents behaviour in front of a deterioration of their health capital and the decrease of health investment efficiency, vi) The distortions entailed by private health expenditures on savings, education and the productivity of agents in poor countries.