The Economics of Aging: Living Longer versus Living Better

The July 2021 issue of Nature Aging—one of the prestigious Nature periodicals’ group—published “The Economic Value of Targeting Aging.”1 It begins by asserting that changes in U.S. life expectancy and attention to “healthy aging” raise questions that biomedical scientists and economists alike must tackle.

What kinds of questions?

Is it preferable for biomedical research to aim at extending life? Or should its goal be to “compress morbidity” to make the same lifespan healthier?

Is it preferable for biomedical research to aim at extending life? Or should its goal be to “compress morbidity” to make the same lifespan healthier? What is the economic value of each emphasis?

The article, although it appends several pages summarizing the mathematics of its methodology, states its conclusions in reader-friendly terms: “[C]ompression of morbidity that improves health is more valuable than further increases in life expectancy . . . [and] targeting aging offers potentially larger economic gains than eradicating individual diseases.” (616)

Of course, these conclusions are intended to “inform” government policy—and government policy is cast always and everywhere in terms of the collective and not the individual. For example, the authors write, “We show that a slowdown in aging that increases life expectancy by 1 year is worth US$38 trillion, and by 10 years, US$367 trillion. Ultimately, the more progress that is made in improving how we age [versus how long we live], the greater the [economic] value….” (616)

Extended life expectancy (mine is 10 more years) might serve me, as an individual, better than research to keep the U.S. population at large on the job longer. Just one man’s perspective.

As a 78-year-old man still blessed with good health, it occurred to me while reading this that research that extended life expectancy (mine is 10 more years) might serve me, as an individual, better than research to keep the U.S. population at large on the job longer. Just one man’s perspective. If my taxes over approximately 62 years (since I turned 16) have gone to support the world’s largest, most expensive biomedical research enterprise, to what extent will my interests be represented? My interests are those of any individual fortunate enough to enter older age healthy and with a relatively greater stake in living longer.

But that is not the focus of the economic analysis, which reports the Global Burden of Disease data indicating that for the last 150 years, life expectancy has soared in the United States and other developed countries, but the proportion of life in good health has not increased. Longer life with no greater proportion lived in good health equals more years in poor health—statistically, for the population at large.

Certainly, there are economic issues raised by an aging population with proportionately more years lived in ill health. In a few years (2030), one-fifth of all Americans will be over the age of 65, a doubling over the past 60 years. The retirement age will keep increasing to 67, then will be capped (for now) at that level, as affirmed by Social Security and Medicare.2

1. Economic growth, as measured by GDP, reduces in basic terms to growth in the working age population multiplied by productivity. Neoclassical economics identifies productivity chiefly with capital invested per worker, especially in technology. And, despite some Luddite sentiment, technology is our strong suit.
2. The downside is that technology displaces workers at least temporarily, and among OECD nations, the United States is second only to Great Britain in worker displacement.
3. On the other hand, our population is not only getting older but also more diverse. Between now and 2037, the U. S. population will increase by 35 million from births that exceed deaths. More than half of that increase will be thanks to a burgeoning Hispanic population.
4. Millennials (now ages 23 to 38) are viewed as having the greatest potential to sustain U.S. economic growth, but they are struggling. On average, they are underemployed, have too much debt, and save little. A factor still very much in play is the role of the gig economy, which does not fit smoothly into existing systems for paying and saving for healthcare and retirement. Today, U.S. households under 35 years old earn less (inflation-adjusted) than comparable households a decade ago ($40,500 versus $43,300).
5. Finally, of course, an older, sicker population keeps increasing the cost to government of retirement, healthcare, and safety net programs, which takes us right back to the point that collectively if we live longer, and are sick longer, we hasten the often-predicted fiscal crisis of Medicare and Social Security.

The United States does face the challenges of sustaining economic growth as its population on average becomes older and sicker and labor force participation declines. Yes, one element of the problem is a population living longer with more years of chronic illness. But that is only one factor in an equation that involves—just for example—immigration policy, investment in technology and worker training, a workforce (millennials) with potential but also problems, and government’s funding of healthcare and aspects of retirement.

Mentioned far less often are factors such as the impact of regulation on productivity, the proportion of potential investment capital taxed away, welfare state disincentives to work, failing public education, and inefficiencies of partially socialized healthcare and retirement investment. (My search turned up dozens of policy statements addressing how an aging population will make capitalism “unworkable” for every article on free market prescriptions such as privatizing healthcare insurance.)

For interventionist-welfare statists, of course, the least painful course is to continue all the above programs and policies. And declare a grand strategy of using government’s dominant position in funding research—relentlessly aggrandized since WWII—to steer the national biomedical research enterprise toward the goal of shorter but proportionately healthier (i.e., more productive, cheaper for the welfare state) lives.

Really? Is this an emerging policy bias? More research would be required to prove that, but there are suggestive indications. Most notable is an outpouring of policy papers on the theme “Living Too Long.” A few examples:

1. “Living Too Long” (“The current focus of medical research on increasing the quantity rather than the quality of life is damaging our health and harming the economy.”)3
2. “Great Desire for Extended Life and Health amongst the American Public” (but very limited desire for longer life spans per se).4
3. “Who wants to live forever? Three arguments against extending the human lifespan” (“Researchwith the explicit aim of extending the human lifespan is both undesirable and morally unacceptable.”)5

Examples could be multiplied without end. The message is that longevity per se is not a desirable national objective. The intensive focus on morbidity compression versus longevity seems evident to the healthcare policy world.

To expect research on longevity is a personal, not to say “anti-social,” perspective.

If you are like me, past 75 and in good health, your interest in extending longevity is not relevant to the national interest, which is economic growth. To expect research on longevity is a personal, not to say “anti-social,” perspective.

The focus of research will never satisfy everyone. A story on “billionaires who race to fund anti-aging projects” reports that “Earlier this year [2022], Altos Labs, a partial cellular reprogramming company, drew billions of dollars of investment, including from Jeff Bezos and Yuri Milner. Google founders Sergey Brin and Larry Page have put billions into Calico. Peter Thiel was an early backer of Unity Biotechnology. Peter Diamandis is placing bets on young blood and stem cells.”

This private, individual support for biomedical and clinical research, as for all market-driven investments, is motivated by personal value priorities (such as cures for certain diseases) and one such priority, among those fortunate to age in good health, is longevity. Of course, the discoveries of the scientists supported by these private investments potentially will benefit everyone.

Public funding of biomedical research in the USA is dominated by one funding agency to an almost absurd degree.

But funding of biomedical research responsive to priorities of individuals and private organizations is little more than a rounding error of the research budget driven by national policy prescriptions. The Lancet points out: “Public funding of biomedical research in the USA is dominated by one funding agency to an almost absurd degree. The National Institutes of Health (NIH) has an annual budget of more than US$30 billion—no other source of research funding in the world even comes close to that figure.”6

No one bothers anymore to dispute that politics drives the allocation of government grants. “We investigated . . . congressional appropriations bills and appropriations committee meeting reports covering the 20 fiscal years between 1984 and 2003. During every year of this period, the director of the NIH negotiated with the Department of Health and Human Services and the Office of Management and Budget within the Executive Office of the President to craft a budget request for the NIH that was consistent with White House priorities.”

If the “national interest” has become identified (as I hypothesize) with putting the brakes on lifespan increases (thus relieving pressure on the welfare state) and prioritizing the extension of years worked (thus sustaining American economic leadership), then that is how the billions will be spent.

Footnotes

[1] Andrew J. Scott, Martin Ellison, and David A. Sinclair, “The Economic Value of Targeting Aging,” Nature Aging 1 (July 2021), pp. 616–23.
[2] Paula Campbell Roberts, “What Does an Aging Population Mean for Economic Growth and Investing?” CRI Blog, Center for Retirement Initiatives, McCourt School of Public Policy, Georgetown University, September 2018, 18-07.
[3] Guy C. Brown, “Living Too Long,” EMBO reports 16, no. 2 (February 2015), pp. 137–41, at 137. [EMBO is an acronym for the European Molecular Biology Organization.] [4] Yoni Donner et al., “Great Desire for Extended Life and Health amongst the American Public,” Frontiers in Genetics 6, article 353 (January 20, 2016), pp. 1–2.
[5] Martien A. M. Pijnenburg and Carlo Leget, “Who Wants to Live Forever? Three Arguments against Extending the Human Lifespan,” Journal of Medical Ethics 33, no. 10 (October 2007), pp. 585–87, at 585.
[6] Brian Owens, “Mapping Biomedical Research in the USA,” The Lancet 384, issue 9937 (July 5, 2014), pp. 11–14, at 11.

This was originally published by Econlib on May 1, 2023.

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About the Author: Walter Donway

Walter Donway has written and edited for Savvy Street since its inception in 2014. His essays and interpretative commentaries on breakthrough books have dealt with philosophy, politics, literature, science, history, psychology, and personalities. His new novel, "Retaking College Hill,” became Amazon’s #1 bestseller in political fiction. This year, the Atlas Society published his Pocket Guide to The Fountainhead and Romanticism Reborn--essays on the Romantic movement in literature and its 20th Century revival in Ayn Rand's novels. His collections of essays and short stories and his "Collected Poems" are available on Amazon. He lives in East Hampton with his wife, Robin.