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The health of children and the health of the elderly: implications for economic growth Alberto Palloni Institute for Policy Research Northwestern University

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Plan of presentation I: prospects for healthy aging Demographics: unusual aging process Demographics: unusual aging process Unprecedented speed: mortality and fertility Remarkable Origin: connection early childhood and adult health Erosion of traditional family Erosion of traditional family Fragile institutional context Fragile institutional context The demand for care

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Plan of presentation II: healthy children and economic growth Early childhood health and acquisition of individual traits Early childhood health and acquisition of individual traits Cognitive Non cognitive Socioeconomic achievement Socioeconomic achievement Human K Economic growth HUMAN K

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Plan of presentation I: prospects for healthy aging Demographics: unusual aging process Demographics: unusual aging process Unprecedented speed: mortality and fertility Remarkable Origin: connection early childhood and adult health Erosion of traditional family Erosion of traditional family Fragile institutional context Fragile institutional context The demand for care

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Origins of aging Proportion over 60 or 65: Proportion over 60 or 65: CURRENT in fertility PAST decreases older age mortality Rate of growth over 60 or 65: Rate of growth over 60 or 65: PAST fertility PAST mortality decline in early childhood PAST decreases older age mortality

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Aging is produced because proportions at older ages are too high

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Compressed aging: the rule of 1/4 How long does it take for the proportion over 65 to go from 7 to 14 percent? How long does it take for the proportion over 65 to go from 7 to 14 percent? France: 115 years China:27 years Brazil:21 years Thailand:22 years

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Aging occurs because rate of growth of older population exceeds rate of growth of younger population

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Consequence for composition of elderly by health status:2000-2030 Survival due to medical technology and public health NOT better standards of living Survival due to medical technology and public health NOT better standards of living Higher average exposure to early childhood illnesses and poverty during childhood Higher average exposure to early childhood illnesses and poverty during childhood Potential for worse health and disability Potential for worse health and disability

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Rapid aging: the rule of 17 How long does it take for the population 65 and over to double its size? How long does it take for the population 65 and over to double its size?

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Peculiar aging: origin of elderly growth (2000-2030) Growth of past birth cohorts: 10-15% Growth of past birth cohorts: 10-15% Past mortality decline 0 to 60:40-60% Past mortality decline 0 to 60:40-60% Past motality decline 60+:15-20% Past motality decline 60+:15-20%

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The rule of 2/3 About 2/3 of the growth of population over 65 between years 2000 and 2030 is due to early childhood mortality decline in the 1940-1970 period About 2/3 of the growth of population over 65 between years 2000 and 2030 is due to early childhood mortality decline in the 1940-1970 period

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Effects Higher prevalence of diabetes and CVD Higher prevalence of diabetes and CVD In Mexico odds are increased by 20 to 40% Higher levels of disability: Higher levels of disability: In Mexico odds are increased by 30 to 50% Lower levels of healthy life expectancy Lower levels of healthy life expectancy In Mexico decreases from 14 to about 11

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Plan of presentation I: prospects for healthy aging Demographics: unusual aging process Demographics: unusual aging process Unprecedented speed: mortality and fertility Remarkable Origin: connection early childhood and adult health Erosion of traditional family Erosion of traditional family Fragile institutional context Fragile institutional context The demand for care

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The family Demography of kin Demography of kin Ideological context: intergenerational contract Ideological context: intergenerational contract

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The supply of kin

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Ideological context Changes of values regarding children Changes of values regarding children Is old age security motive waning? Is old age security motive waning? The demise of the intergenerational contract The demise of the intergenerational contract

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Plan of presentation I: prospects for healthy aging Demographics: unusual aging process Demographics: unusual aging process Unprecedented speed: mortality and fertility Remarkable Origin: connection early childhood and adult health Erosion of traditional family Erosion of traditional family Fragile institutional context Fragile institutional context The demand for care

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Institutional fragility Lackluster aggregate economic performance Lackluster aggregate economic performance Diminished role of public sector or inexistent Diminished role of public sector or inexistent Poverty Poverty Inequality Inequality

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Plan of presentation II: healthy children and economic growth Early childhood health and acquisition of individual traits Early childhood health and acquisition of individual traits Cognitive Non cognitive Socioeconomic achievement Socioeconomic achievement Human K Economic growth

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The determinants of adult wages: and Human capital Parental background (wallets) Parental background (wallets) Educational attainment Educational attainment Cognitive (+non cognitive) traits Cognitive (+non cognitive) traits Early health Early health

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Decomposition of effects of parental social class on sons social class

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Main inference The effects of early health on wages are important but they also work through cognitive skills and non- cognitive traits. None are direct. The effects of early health on wages are important but they also work through cognitive skills and non- cognitive traits. None are direct.

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Plan of presentation II: healthy children and economic growth Early childhood health and acquisition of individual traits Early childhood health and acquisition of individual traits Cognitive Non cognitive Socioeconomic achievement Socioeconomic achievement Human K Economic growth

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The dilemma: within family and in society at large Old age related health expenditures: healthy aging Old age related health expenditures: healthy aging Future investments in child health: human capital and future economic growth Future investments in child health: human capital and future economic growth