The health of children and the health of the elderly: implications for economic growth

The health of children and the health The health of children and the health of the elderly: implications for of the elderly: implications for

economic growtheconomic growth

Alberto PalloniAlberto PalloniInstitute for Policy ResearchInstitute for Policy Research

Northwestern UniversityNorthwestern University

Plan of presentation I: prospects Plan of presentation I: prospects for healthy agingfor healthy aging

• Demographics: unusual aging processDemographics: unusual aging process– Unprecedented speed: mortality and fertilityUnprecedented speed: mortality and fertility– Remarkable Origin: connection early childhood Remarkable Origin: connection early childhood

and adult healthand adult health

• Erosion of traditional familyErosion of traditional family

• Fragile institutional contextFragile institutional context

The demand for care

Plan of presentation II: healthy Plan of presentation II: healthy children and economic growthchildren and economic growth

• Early childhood health and Early childhood health and acquisition of individual traitsacquisition of individual traits– CognitiveCognitive– Non cognitiveNon cognitive

• Socioeconomic achievementSocioeconomic achievement

Human K Economic growth

HUMAN K

Plan of presentation I: prospects Plan of presentation I: prospects for healthy agingfor healthy aging

• Demographics: unusual aging processDemographics: unusual aging process– Unprecedented speed: mortality and fertilityUnprecedented speed: mortality and fertility– Remarkable Origin: connection early childhood Remarkable Origin: connection early childhood

and adult healthand adult health

• Erosion of traditional familyErosion of traditional family

• Fragile institutional contextFragile institutional context

The demand for care

Origins of agingOrigins of aging

• Proportion over 60 or 65:Proportion over 60 or 65:– CURRENT in fertilityCURRENT in fertility– PAST decreases older age mortalityPAST decreases older age mortality

• Rate of growth over 60 or 65:Rate of growth over 60 or 65:– PAST fertilityPAST fertility– PAST mortality decline in early PAST mortality decline in early

childhoodchildhood– PAST decreases older age mortalityPAST decreases older age mortality

Aging is produced because Aging is produced because proportions at older ages are proportions at older ages are

too hightoo high

Compressed aging: the rule of Compressed aging: the rule of 1/41/4

• How long does it take for the How long does it take for the proportion over 65 to go from 7 to 14 proportion over 65 to go from 7 to 14 percent?percent?

– France: France: 115 years115 years– China:China: 27 years27 years– Brazil:Brazil: 21 years21 years– Thailand:Thailand: 22 years22 years

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

Consequence for composition of Consequence for composition of elderly by health status:2000-elderly by health status:2000-

20302030

• Survival due to medical technology and Survival due to medical technology and public health NOT better standards of public health NOT better standards of livingliving

• Higher average exposure to early Higher average exposure to early childhood illnesses and poverty during childhood illnesses and poverty during childhoodchildhood

• Potential for worse health and disabilityPotential for worse health and disability

Rapid aging: the rule of 17Rapid aging: the rule of 17

• How long does it take for the How long does it take for the population 65 and over to double its population 65 and over to double its size?size?

Peculiar aging: origin of elderly Peculiar aging: origin of elderly growthgrowth

(2000-2030)(2000-2030)

• Growth of past birth cohorts: 10-15%Growth of past birth cohorts: 10-15%

• Past mortality decline 0 to 60:40-Past mortality decline 0 to 60:40-60%60%

• Past motality decline 60+:15-20%Past motality decline 60+:15-20%

The rule of 2/3The rule of 2/3

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

EffectsEffects

• Higher prevalence of diabetes and CVDHigher prevalence of diabetes and CVD– In Mexico odds are increased by 20 to 40%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%In Mexico odds are increased by 30 to 50%

• Lower levels of healthy life expectancyLower levels of healthy life expectancy– In Mexico decreases from 14 to about 11In Mexico decreases from 14 to about 11

Plan of presentation I: prospects Plan of presentation I: prospects for healthy agingfor healthy aging

• Demographics: unusual aging processDemographics: unusual aging process– Unprecedented speed: mortality and fertilityUnprecedented speed: mortality and fertility– Remarkable Origin: connection early childhood Remarkable Origin: connection early childhood

and adult healthand adult health

• Erosion of traditional familyErosion of traditional family

• Fragile institutional contextFragile institutional context

The demand for care

The familyThe family

• Demography of kinDemography of kin

• Ideological context: intergenerational Ideological context: intergenerational contractcontract

The supply of kinThe supply of kin

Ideological contextIdeological context

• Changes of values regarding childrenChanges of values regarding children

• Is old age security motive waning?Is old age security motive waning?

• The demise of the intergenerational The demise of the intergenerational contractcontract

Plan of presentation I: prospects Plan of presentation I: prospects for healthy agingfor healthy aging

• Demographics: unusual aging processDemographics: unusual aging process– Unprecedented speed: mortality and fertilityUnprecedented speed: mortality and fertility– Remarkable Origin: connection early childhood Remarkable Origin: connection early childhood

and adult healthand adult health

• Erosion of traditional familyErosion of traditional family

• Fragile institutional contextFragile institutional context

The demand for care

Institutional fragilityInstitutional fragility

• Lackluster aggregate economic performanceLackluster aggregate economic performance

• Diminished role of public sector or inexistentDiminished role of public sector or inexistent

• PovertyPoverty

• InequalityInequality

Plan of presentation II: healthy Plan of presentation II: healthy children and economic growthchildren and economic growth

• Early childhood health and Early childhood health and acquisition of individual traitsacquisition of individual traits– CognitiveCognitive– Non cognitiveNon cognitive

• Socioeconomic achievementSocioeconomic achievement

Human K Economic growth

The determinants of adult The determinants of adult wages:wages:

and Human capitaland Human capital

• Parental background (“wallets”)Parental background (“wallets”)

• Educational attainmentEducational attainment

• Cognitive (+non cognitive) traitsCognitive (+non cognitive) traits

• Early health Early health

Decomposition of effects of Decomposition of effects of parental social class on sons’ parental social class on sons’ social classsocial class

Cognitive 51%

Wallet 31%

Health 9%

Decomposition of effects of Decomposition of effects of parental social class on sons’ parental social class on sons’ social classsocial class

Education9%

Cognitive 51%

Wallet 31%

Health 9%

Decomposition of effects of Decomposition of effects of parental social class on sons’ parental social class on sons’ social classsocial class

Education9%

Cognitive 51%

Wallet 31%

Health 9%

Decomposition of effects of Decomposition of effects of parental social class on sons’ parental social class on sons’ social classsocial class

Education9%

Cognitive 51%

Wallet 31%

Health 9%

Wallet (Direct)

Health (LBW)

Health (Chronic)

Cognitive

Education

Main inferenceMain inference

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

Plan of presentation II: healthy Plan of presentation II: healthy children and economic growthchildren and economic growth

• Early childhood health and Early childhood health and acquisition of individual traitsacquisition of individual traits– CognitiveCognitive– Non cognitiveNon cognitive

• Socioeconomic achievementSocioeconomic achievement

Human K Economic growth

The dilemma: within family and The dilemma: within family and in society at largein society at large

• Old age related health expenditures: Old age related health expenditures: healthy aginghealthy aging

• Future investments in child health: Future investments in child health: human capital and future economic human capital and future economic growthgrowth