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Suggested Citation:"Front Matter." National Academies of Sciences, Engineering, and Medicine. 2015. The Growing Gap in Life Expectancy by Income: Implications for Federal Programs and Policy Responses. Washington, DC: The National Academies Press. doi: 10.17226/19015.
×

THE GROWING GAP IN
LIFE EXPECTANCY BY INCOME

IMPLICATIONS FOR FEDERAL PROGRAMS
AND POLICY RESPONSES

Committee on the Long-Run Macroeconomic Effects of
the Aging U.S. Population—Phase II

Committee on Population
Division of Behavioral and Social Sciences and Education

and

Board on Mathematical Sciences and Their Applications
Division on Engineering and Physical Sciences

image

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Suggested Citation:"Front Matter." National Academies of Sciences, Engineering, and Medicine. 2015. The Growing Gap in Life Expectancy by Income: Implications for Federal Programs and Policy Responses. Washington, DC: The National Academies Press. doi: 10.17226/19015.
×

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Any opinions, findings, conclusions, or recommendations expressed in this publication are those of the author(s) and do not necessarily reflect the views of the organizations or agencies that provided support for the project. This activity was supported by the U.S. Department of Treasury through Contract No. 10001089.

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International Standard Book Number-10: 0-309-31707-X

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Suggested citation: National Academies of Sciences, Engineering, and Medicine. (2015). The Growing Gap in Life Expectancy by Income: Implications for Federal Programs and Policy Responses. Committee on the Long-Run Macroeconomic Effects of the Aging U.S. Population-Phase II. Committee on Population, Division of Behavioral and Social Sciences and Education. Board on Mathematical Sciences and Their Applications, Division on Engineering and Physical Sciences. Washington, DC: The National Academies Press.

Suggested Citation:"Front Matter." National Academies of Sciences, Engineering, and Medicine. 2015. The Growing Gap in Life Expectancy by Income: Implications for Federal Programs and Policy Responses. Washington, DC: The National Academies Press. doi: 10.17226/19015.
×

image

The National Academy of Sciences was established in 1863 by an Act of Congress, signed by President Lincoln, as a private, nongovernmental institution to advise the nation on issues related to science and technology. Members are elected by their peers for outstanding contributions to research. Dr. Ralph J. Cicerone is president.

The National Academy of Engineering was established in 1964 under the charter of the National Academy of Sciences to bring the practices of engineering to advising the nation. Members are elected by their peers for extraordinary contributions to engineering. Dr. C. D. Mote, Jr., is president.

The National Academy of Medicine (formerly the Institute of Medicine) was established in 1970 under the charter of the National Academy of Sciences to advise the nation on medical and health issues. Members are elected by their peers for distinguished contributions to medicine and health. Dr. Victor J. Dzau is president.

The three Academies work together as the National Academies of Sciences, Engineering, and Medicine to provide independent, objective analysis and advice to the nation and conduct other activities to solve complex problems and inform public policy decisions. The Academies also encourage education and research, recognize outstanding contributions to knowledge, and increase public understanding in matters of science, engineering, and medicine.

Learn more about the National Academies of Sciences, Engineering, and Medicine at www.national-academies.org.

Suggested Citation:"Front Matter." National Academies of Sciences, Engineering, and Medicine. 2015. The Growing Gap in Life Expectancy by Income: Implications for Federal Programs and Policy Responses. Washington, DC: The National Academies Press. doi: 10.17226/19015.
×

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Suggested Citation:"Front Matter." National Academies of Sciences, Engineering, and Medicine. 2015. The Growing Gap in Life Expectancy by Income: Implications for Federal Programs and Policy Responses. Washington, DC: The National Academies Press. doi: 10.17226/19015.
×

COMMITTEE ON THE LONG-RUN MACROECONOMIC
EFFECTS OF THE AGING U.S. POPULATION-PHASE II

RONALD LEE (Cochair), Department of Demography and Center on the Economics and Demography of Aging, University of California, Berkeley

PETER R. ORSZAG (Cochair), Global Banking, Citigroup

ALAN J. AUERBACH, Economics Department and Burch Center for Tax Policy and Public Finance, University of California, Berkeley

KERWIN K. CHARLES, University of Chicago Harris School of Public Policy and National Bureau of Economic Research

COURTNEY C. COILE, Department of Economics, Wellesley College, and National Bureau of Economic Research

WILLIAM GALE, Economic Studies Program, Brookings Institution

DANA P. GOLDMAN, Schaeffer Center for Health Policy and Economics, University of Southern California

CHARLES M. LUCAS, Osprey Point Consulting

LOUISE M. SHEINER, Economic Studies Program, Brookings Institution

DAVID N. WEIL, Department of Economics, Brown University

JUSTIN WOLFERS, Department of Economics and Public Policy, University of Michigan

REBECA WONG, Sealy Center on Aging, University of Texas Medical Branch

KEVIN KINSELLA, Staff Director

Suggested Citation:"Front Matter." National Academies of Sciences, Engineering, and Medicine. 2015. The Growing Gap in Life Expectancy by Income: Implications for Federal Programs and Policy Responses. Washington, DC: The National Academies Press. doi: 10.17226/19015.
×

COMMITTEE ON POPULATION
2015

KATHLEEN MULLAN HARRIS (Chair), Department of Sociology, University of North Carolina at Chapel Hill

JERE R. BEHRMAN, Department of Economics, University of Pennsylvania

VICKI A. FREEDMAN, Institute for Social Research, University of Michigan

MARK D. HAYWARD, Population Research Center, University of Texas at Austin

HILLARD S. KAPLAN, Department of Anthropology, University of New Mexico

SARA S. MCLANAHAN, Center for Research on Child Wellbeing, Princeton University

EMILIO A. PARRADO, Department of Sociology, University of Pennsylvania

DAVID R. WEIR, Survey Research Center, Institute for Social Research, University of Michigan

JOHN R. WILMOTH, Population Division/DESA, United Nations

THOMAS J. PLEWES, Director

TINA M. LATIMER, Program Coordinator

Suggested Citation:"Front Matter." National Academies of Sciences, Engineering, and Medicine. 2015. The Growing Gap in Life Expectancy by Income: Implications for Federal Programs and Policy Responses. Washington, DC: The National Academies Press. doi: 10.17226/19015.
×

BOARD ON MATHEMATICAL SCIENCES
AND THEIR APPLICATIONS
2015

DONALD G. SAARI (Chair), Departments of Mathematics and Economics, University of California, Irvine

DONALD ARNOLD, School of Mathematics, University of Minnesota

JOHN B. BELL, Center for Computational Sciences and Engineering, Lawrence Berkeley National Laboratory

VICKI BIER, Industrial and Systems Engineering, University of Wisconsin

JOHN R. BIRGE, Booth School of Business, University of Chicago

L. ANTHONY COX, JR., Cox Associates

MARK L. GREEN, Department of Mathematics, University of California, Los Angeles

BRYNA KRA, Department of Mathematics, Northwestern University

JOSEPH A. LANGSAM, Morgan Stanley (retired)

ANDREW LO, Sloan School of Management, Massachusetts Institute of Technology

DAVID MAIER, Computer Science Department, Portland State University

WILLIAM A. MASSEY, Department of Operations Research and Financial Engineering, Princeton University

JUAN MEZA, School of Natural Science, University of California, Merced

CLAUDIA M. NEUHAUSER, Informatics Institute, University of Minnesota

FRED ROBERTS, DHS Center of Excellence, Rutgers University

GUILLERMO SAPIRO, Department of Electrical and Computer Engineering, Duke University

CARL P. SIMON, Ford School of Public Policy, University of Michigan

KATEPALLI SREENIVASAN, Polytechnic Institute, New York University

ELIZABETH A. THOMPSON, Department of Statistics, University of Washington

SCOTT T. WEIDMAN, Director

Page viii Cite
Suggested Citation:"Front Matter." National Academies of Sciences, Engineering, and Medicine. 2015. The Growing Gap in Life Expectancy by Income: Implications for Federal Programs and Policy Responses. Washington, DC: The National Academies Press. doi: 10.17226/19015.
×

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Suggested Citation:"Front Matter." National Academies of Sciences, Engineering, and Medicine. 2015. The Growing Gap in Life Expectancy by Income: Implications for Federal Programs and Policy Responses. Washington, DC: The National Academies Press. doi: 10.17226/19015.
×

Preface

In 2010, Congress asked the National Research Council (NRC), the operating arm of the National Academy of Sciences, to undertake a study of the long-run macroeconomic effects of the aging U.S. population. This study was divided into two phases. Phase I began in September 2010 and culminated in the 2012 report Aging and the Macroeconomy: Long-Term Implications of an Older Population (National Research Council, 2012), which summarized existing knowledge in relevant domains, discussed various policy implications, and offered a set of research recommendations.

In the course of the Phase I work, it became clear that a useful next step would be to further consider the policy implications of certain macro-level changes in the U.S. population through the use of quantitative modeling and projections. To do so, the NRC appointed an ad hoc Phase II committee in late 2012 under the auspices of the NRC’s Committee on Population and the Board on Mathematical Sciences and their Applications. The Phase II committee investigated the steepening U.S. mortality gradient by income and focused on the intersection of mortality changes and government entitlement programs, with an eye toward potential policy responses that would help programs meet the fiscal challenges posed by an aging population.

No committee could perform a task such as this without the assistance and close cooperation of many people. We would like to thank, first and foremost, our fellow committee members. Despite having many other responsibilities, committee members generously donated their time and expertise to the project. The committee met six times over the course of the project. Members contributed to the study by providing background

Suggested Citation:"Front Matter." National Academies of Sciences, Engineering, and Medicine. 2015. The Growing Gap in Life Expectancy by Income: Implications for Federal Programs and Policy Responses. Washington, DC: The National Academies Press. doi: 10.17226/19015.
×

readings, leading discussions, making presentations, drafting and revising chapters, and critically commenting on the various report drafts. The perspectives that members brought to the table were instrumental in synthesizing ideas throughout the committee process.

Several members of the Phase I committee provided valuable comments regarding the direction of the Phase II project. For their suggestions, we thank Axel Boersch-Supan, Max Planck Institute for Social Law and Social Policy; Deborah J. Lucas, Massachusetts Institute of Technology; William D. Nordhaus, Yale University; and James M. Poterba, Massachusetts Institute of Technology.

We very much appreciate the ideas and research of scholars who are working on issues that the committee examined. For their presentations and/or related input to the committee, we thank Barry P. Bosworth, Brookings Institution; Joyce Manchester, Congressional Budget Office; Samuel Preston, University of Pennsylvania; and Hilary Waldron, Social Security Administration.

An integral part of this project involved modifications to the Future Elderly Model and the subsequent production of data and graphs. This was a collaborative enterprise in which committee members worked with Bryan Tysinger and Duncan Leaf, Leonard D. Schaeffer Center for Health Policy and Economics, University of Southern California, whose sustained efforts were indispensable. We also thank Jeffrey Sullivan, Precision Health Economics, for his valuable input during early stages of the project, and Gretchen S. Donehower, Center on the Economics and Demography of Aging, University of California, Berkeley, for producing analyses used in Chapter 3.

This report has been reviewed in draft form by individuals chosen for their diverse perspectives and technical expertise, in accordance with procedures approved by the National Academies of Sciences, Engineering, and Medicine’s Report Review Committee. The purpose of this independent review is to provide candid and critical comments that will assist the institution in making its published report as sound as possible and to ensure that the report meets institutional standards for objectivity, evidence, and responsiveness to the study charge. The review comments and draft manuscript remain confidential to protect the integrity of the deliberative process. We thank the following individuals for their review of this report: Sandro Galea, Department of Epidemiology, Mailman School of Public Health, Columbia University; James S. House, Institute for Social Research, University of Michigan; Laurence J. Kotlikoff, Department of Economics, Boston University; Alicia H. Munnell, Carroll School of Management and Center for Retirement Research, Boston College; Samuel H. Preston, Population Studies Center, University of Pennsylvania; Jonathan S. Skinner, Department of Economics, Dartmouth University; Bruce D. Spencer, Department

Suggested Citation:"Front Matter." National Academies of Sciences, Engineering, and Medicine. 2015. The Growing Gap in Life Expectancy by Income: Implications for Federal Programs and Policy Responses. Washington, DC: The National Academies Press. doi: 10.17226/19015.
×

of Statistics, Northwestern University; Wilbert van der Klaauw, Center for Microeconomic Data, Research and Statistics, Federal Reserve Bank of New York; and James W. Vaupel, Max Planck Institute for Demographic Research, Rostock, Germany.

Although the reviewers listed above have provided many constructive comments and suggestions, they were not asked to endorse the conclusions or recommendations nor did they see the final draft of the report before its release. The review of this report was overseen by V. Joseph Hotz, Department of Economics, Duke University, and Charles F. Manski, Department of Economics, Northwestern University. Appointed by the Academies, they were responsible for ensuring that an independent examination of this report was carried out in accordance with institutional procedures and that all review comments were carefully considered. Responsibility for the final content rests entirely with the authoring committee and the institution.

Lastly, we acknowledge the efforts of several individuals within the Academies. We are indebted to Danielle Johnson, senior program assistant, for providing the essential infrastructure for this project. Danielle handled many administrative matters during the committee’s tenure, with assistance from Barbara Boyd and Tina Latimer. Mary Ghitelman was instrumental in preparing the final graphs throughout the report. We also thank Kirsten Sampson Snyder for her coordination of the review process and Robert J. Katt, who edited the volume and made numerous suggestions for its improvement. Kevin Kinsella, the Academies study director, managed the overall work of the committee, along with Thomas Plewes, director of the Committee on Population, and Scott Weidman, director of the Board on Mathematical Sciences and Their Applications.

Ronald D. Lee and Peter R. Orszag, Cochairs
Committee on the Long-Run Macroeconomic Effects of
the Aging U.S. Population—Phase II

Suggested Citation:"Front Matter." National Academies of Sciences, Engineering, and Medicine. 2015. The Growing Gap in Life Expectancy by Income: Implications for Federal Programs and Policy Responses. Washington, DC: The National Academies Press. doi: 10.17226/19015.
×

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Suggested Citation:"Front Matter." National Academies of Sciences, Engineering, and Medicine. 2015. The Growing Gap in Life Expectancy by Income: Implications for Federal Programs and Policy Responses. Washington, DC: The National Academies Press. doi: 10.17226/19015.
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Suggested Citation:"Front Matter." National Academies of Sciences, Engineering, and Medicine. 2015. The Growing Gap in Life Expectancy by Income: Implications for Federal Programs and Policy Responses. Washington, DC: The National Academies Press. doi: 10.17226/19015.
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Suggested Citation:"Front Matter." National Academies of Sciences, Engineering, and Medicine. 2015. The Growing Gap in Life Expectancy by Income: Implications for Federal Programs and Policy Responses. Washington, DC: The National Academies Press. doi: 10.17226/19015.
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Suggested Citation:"Front Matter." National Academies of Sciences, Engineering, and Medicine. 2015. The Growing Gap in Life Expectancy by Income: Implications for Federal Programs and Policy Responses. Washington, DC: The National Academies Press. doi: 10.17226/19015.
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Suggested Citation:"Front Matter." National Academies of Sciences, Engineering, and Medicine. 2015. The Growing Gap in Life Expectancy by Income: Implications for Federal Programs and Policy Responses. Washington, DC: The National Academies Press. doi: 10.17226/19015.
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Suggested Citation:"Front Matter." National Academies of Sciences, Engineering, and Medicine. 2015. The Growing Gap in Life Expectancy by Income: Implications for Federal Programs and Policy Responses. Washington, DC: The National Academies Press. doi: 10.17226/19015.
×
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Suggested Citation:"Front Matter." National Academies of Sciences, Engineering, and Medicine. 2015. The Growing Gap in Life Expectancy by Income: Implications for Federal Programs and Policy Responses. Washington, DC: The National Academies Press. doi: 10.17226/19015.
×
PageR7
Page viii Cite
Suggested Citation:"Front Matter." National Academies of Sciences, Engineering, and Medicine. 2015. The Growing Gap in Life Expectancy by Income: Implications for Federal Programs and Policy Responses. Washington, DC: The National Academies Press. doi: 10.17226/19015.
×
PageR8
Suggested Citation:"Front Matter." National Academies of Sciences, Engineering, and Medicine. 2015. The Growing Gap in Life Expectancy by Income: Implications for Federal Programs and Policy Responses. Washington, DC: The National Academies Press. doi: 10.17226/19015.
×
PageR9
Suggested Citation:"Front Matter." National Academies of Sciences, Engineering, and Medicine. 2015. The Growing Gap in Life Expectancy by Income: Implications for Federal Programs and Policy Responses. Washington, DC: The National Academies Press. doi: 10.17226/19015.
×
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Suggested Citation:"Front Matter." National Academies of Sciences, Engineering, and Medicine. 2015. The Growing Gap in Life Expectancy by Income: Implications for Federal Programs and Policy Responses. Washington, DC: The National Academies Press. doi: 10.17226/19015.
×
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Suggested Citation:"Front Matter." National Academies of Sciences, Engineering, and Medicine. 2015. The Growing Gap in Life Expectancy by Income: Implications for Federal Programs and Policy Responses. Washington, DC: The National Academies Press. doi: 10.17226/19015.
×
PageR12
Page xiii Cite
Suggested Citation:"Front Matter." National Academies of Sciences, Engineering, and Medicine. 2015. The Growing Gap in Life Expectancy by Income: Implications for Federal Programs and Policy Responses. Washington, DC: The National Academies Press. doi: 10.17226/19015.
×
PageR13
Suggested Citation:"Front Matter." National Academies of Sciences, Engineering, and Medicine. 2015. The Growing Gap in Life Expectancy by Income: Implications for Federal Programs and Policy Responses. Washington, DC: The National Academies Press. doi: 10.17226/19015.
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The U.S. population is aging. Social Security projections suggest that between 2013 and 2050, the population aged 65 and over will almost double, from 45 million to 86 million. One key driver of population aging is ongoing increases in life expectancy. Average U.S. life expectancy was 67 years for males and 73 years for females five decades ago; the averages are now 76 and 81, respectively. It has long been the case that better-educated, higher-income people enjoy longer life expectancies than less-educated, lower-income people. The causes include early life conditions, behavioral factors (such as nutrition, exercise, and smoking behaviors), stress, and access to health care services, all of which can vary across education and income.

Our major entitlement programs – Medicare, Medicaid, Social Security, and Supplemental Security Income – have come to deliver disproportionately larger lifetime benefits to higher-income people because, on average, they are increasingly collecting those benefits over more years than others. This report studies the impact the growing gap in life expectancy has on the present value of lifetime benefits that people with higher or lower earnings will receive from major entitlement programs. The analysis presented in The Growing Gap in Life Expectancy by Income goes beyond an examination of the existing literature by providing the first comprehensive estimates of how lifetime benefits are affected by the changing distribution of life expectancy. The report also explores, from a lifetime benefit perspective, how the growing gap in longevity affects traditional policy analyses of reforms to the nation’s leading entitlement programs. This in-depth analysis of the economic impacts of the longevity gap will inform debate and assist decision makers, economists, and researchers.

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