europe’s demographic opportunity: unlocking the value of health nicholas eberstadt henry wendt...
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Europe’s Demographic Opportunity:Unlocking The Value Of Health
Nicholas Eberstadt
Henry Wendt Chair in Political Economy
American Enterprise Institute
Bruno Leoni Institute
Milano, 8 June 2007
Figure 1Western Europe v. U.S. Population Structure, 2005
20,0
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55-59
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65-69
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75-79
80+
Western Europe
United States
Source: U.S. Census Bureau, International Data Base, available at http://www.census.gov/cgi-bin/ipc/idbagg [accessed August 3, 2006].
Figure 2Western Europe vs. U.S. Population Structure, 2030
Source: U.S. Census Bureau, International Data Base, available at http://www.census.gov/cgi-bin/ipc/idbagg [accessed August 3, 2006].
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United States
Figure 3The Age Distribution of Great Innovation
Source: Benjamin Jones. 2005. Age and Great Innovation (Working Paper 11359). Cambridge MA: National Bureau of Economic Research.
Source: World Development Indicators, 2003
y = 46.101e0.0723x
R2 = 0.6519100
1'000
10'000
100'000
30 35 40 45 50 55 60 65 70 75 80 85
Figure 4
Health Equals Wealth: LE vs PPP Per Capita GDP
years
US $
Healthy Life Expectancy
67
68
69
70
71
72
73
74
Source: Organisation for Economic Co-operation and Development, Society at a Glance: OECD Social Indicators, 2005 Edition (Paris: OECD, 2005).
Figure 5Healthy Life Expectancy: Western Europe vs US
Figure 6Odds of Not Surviving from Age 20 to Age 65:
Western Europe vs US
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11
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Note: Based on age-specific mortality schedules for the year 2002 Source: Human Mortality Database. University of California, Berkeley (USA), and Max Planck Institute for Demographic Research (Germany). Available at www.mortality.org or www.humanmortality.de (data downloaded on 12/21/06).
Proportion of population that does not survive
Figure 7US Consumption and Labor Earnings by Age*,
Distinguishing private and public components (in kind transfers and prorated items like defense; cash benefits
excluded)
$0
$10'000
$20'000
$30'000
$40'000
$50'000
$60'000
0 10 20 30 40 50 60 70 80 90 100Age
Labor earningsTotal Consumption
public
private
*2000 calculationsSource: Ronald Lee, Global Population Ageing and its Economic Consequences (AEI Press, forthcoming)
Figure 8Male Retirement Age v. Life Expectancy:
France, 1962-1999
Source: Human Mortality Database. University of California, Berkeley (USA), and Max Planck Institute for Demographic Research (Germany). Available at www.mortality.org or www.humanmortality.de (data downloaded on August 3, 2006) and Age of Withdrawal from the Labour Force in OECD Countries, Labor Market and Social Policy Occasional Papers No. 49, by Peter Scherer. January 11, 2002
50
55
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80
Year
Mean Male Retirement Age
Male Life Expectancy
Age
(LE)
0
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55-59 60-64 65-69 70-74 75+
Age
ROK
Japan
USA
Spain
France
Germany
Italy
Figure 9Labor Force Participation Rates:
Europe vs. Non-Europe OECD, c.2004
Source: International Labor Organization, LABORSTA, available at http://laborsta.ilo.org/. Note: Data are for 2004, except for Italy (2005)
Participation Rates
Figure 10Population Change in W. Europe vs US: 2005-2030
Source: U.S. Census Bureau, International Data Base, available at http://www.census.gov/cgi-bin/ipc/idbagg [accessed August 3, 2006].
-10'000'000
-5'000'000
0
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20-24
25-29
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70-74
US
Europe
Population Change
Figure 11Incentives to Retire and Retirement Behavior
1. Difference in participation rates between the age groups 55-59 and 50-54 as a percentage of the participation rate of those aged 50-54 years.2. The implicit tax on working an additional year is the foregone transfer/pension income plus the additional pension contributions paid minus any increase in future pensions as a result of delayed retirement, all expressed as a share of income from work. The calculations in all cases take account of the "regular" old-age pension scheme but consider somewhat different early retirement pathways depending on the country in question or, where such schemes do not apply widely, no such pathways.Source: Strengthening Growth and Public Finances in an Era of Demographic Change, OECD May 13-14, 2004
Fall in male labour fonce participation between ages: 50-54 and 55-59
Implicit tax on continued work at ages 55-59*, per cent
- 15
- 20
- 25
- 30
- 35
- 40
- 10
- 5
0
0 10 20 30 40 50 60 70 80 90
ISL
JAPNOR SWE
NZL
USAAUS
CAN CHE
GBRIRL DEU
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ESP
AUT FRA
BELITA
FINNLD
LUX