The Economics of Aging.

• Author: Skinner, Jonathan
• Position: Program Report

When the NBER's Program on the Economics of Aging began in 1986 under the direction of David Wise, the baby-boom generation was between the ages of 22 and 40. Long-run projections at the time forecast that the United States would transition to an older population distribution. Today, with baby boomers ranging in age from 58 to 76, that projected future is the ongoing reality of our nation. One-fifth of the population will be age 65 or older in the next decade.

Since its inception, the Economics of Aging Program's underlying focus has been the study of the health and financial well-being of people as they age and the larger implications of a population that is increasingly composed of older people. The program continues this broad focus as new and ongoing challenges emerge and evolve.

To illustrate the wide and multidisciplinary scope of research by program affiliates, I briefly describe ongoing work in four areas: the widening health disparities across education and region, a rising number of patients and caregivers struggling with Alzheimer's disease, the impact of the COVID-19 pandemic on the elderly, and the continuing evolution of the financial, physical, and mental health of retirees. This review is only a partial summary of the wide-ranging research carried out by program affiliates. Since the last program report, in 2014, more than 600 working papers related to the Economics of Aging Program have been distributed. Researchers have also published dozens of studies on aging in scientific and clinical journals, precluding inclusion in the NBER working paper series.

Widening Inequality in Mortality by Education and Place

Research by Anne Case and Angus Deaton illustrates the far-reaching effects of "deaths of despair" arising from drug overdoses, suicide, and alcoholism, and the very close association of these deaths with education. (1) These deaths have not only continued to rise, but have largely been among those without a four-year college degree--the majority of American adults. (2) As a consequence, mortality in the US is falling for the college-educated and rising for those without a degree--something not seen in other rich countries. One explanation for this US exceptionalism is the health-care system and the associated approach to financing health care. Another contributor is the drug epidemic and the explosion of prescription opioids after 1996, followed by an epidemic of illegal drug use, including use of diverted prescription drugs, heroin, and fentanyl. Abby Alpert, William Evans, Ethan Lieber, and David Powell find that the introduction and marketing of OxyContin explain a substantial share of overdose deaths over the last two decades. (3)

Hannes Schwandt, Janet Currie, and a team of research collaborators drawn from many nations analyze mortality rates in the US and other high-income countries. They compare high-income and low-income regions in the US with similarly high-and low-income regions in nine European countries. This enables them to estimate separately the income gradient of mortality by country; in the US they estimate separate gradients for Blacks and Whites of all ages. (4) While in 1990 White Americans and Europeans in rich areas had similar overall life expectancy, since then even rich White Americans have lost ground relative to Europeans. As shown in Figure 1, on the next page, there was a reduction in the midlife life expectancy gap between Black Americans and Europeans, but life expectancy for both Black and White Americans plateaued or slightly declined after 2012. The comparison with European countries suggests that substantial improvements in mortality rates of both Black and White Americans are still feasible in both high-income and low-income areas.

There are widening geographic disparities in mortality within the US. Benjamin Couillard, Christopher Foote, Kavish Gandhi, Ellen Meara, and I find that geographic inequality in mortality for midlife Americans increased by about 60 percent between 1992 and 2016. (5) This was not simply because states like New York or California benefited from having a high fraction of college-educated residents who enjoyed the largest health gains during the last several decades. Nor was higher dispersion in mortality caused entirely by the increasing importance of deaths of despair or by rising regional income inequality during the same period. Instead...