Estimating that Technological Progress Accounts for Half of the Gains in Life Span Since the 1960s
Researchers here build an economic model of technological progress and its impact on human life span. The model suggests that advances in technology account for half of the gains in life span from the 1960s on. This is in much the same ballpark as other initiatives that have asked similar questions regarding the causes of the slow upward trend in human longevity over the past century or more.
Life expectancy at birth is presently increasing at something like two years per decade, while remaining life expectancy at 65 is increasing at one year per decade. We should expect this trend to leap upward as the first rejuvenation therapies to deliberately target the mechanisms of aging enter widespread use. Past gains were achieved almost accidentally, as no meaningful efforts were made at the time to directly address the causes of aging. That state of affairs has now changed, and we should expect better outcomes as a result.
We estimate a stochastic life-cycle model of endogenous health spending, asset accumulation, and retirement to investigate the causes behind the increase in health spending and longevity in the United States over the period 1965-2005. Accounting for changes over time in taxes, transfers, Social Security, income, health insurance, smoking and obesity, and technological progress, we estimate that technological progress is responsible for half of the increase in life expectancy over the period.
Substantial growth in health spending over the period is largely the result of growth in economic resources and the generosity of health insurance, with a modest role for medical technological progress. The growth in spending does not come from changes in a single source, but sources jointly interacted to increase spending: complementarity effects explain up to 26.3% of the increase in health spending. Overall, for those born in 1940, the combined changes in resources and health insurance that occurred over the period are valued at 35.7% of lifetime consumption.