The economics of aging with infectious and chronic diseases.

We develop an economic model of aging in which the susceptibility and severity of infectious diseases depend on the accumulated health deficits (immunosenescence) and the life history of infections affects the accumulation of chronic health deficits (inflammaging). Individuals invest in their health to slow down health deficit accumulation and take measures to protect themselves from infectious diseases. We calibrate the model for an average American and explore how health expenditure, life expectancy, and the value of life depend on individual characteristics, medical technology, and the disease environment. We then use counterfactual computational experiments of the U.S. epidemiological transition 1860-2010 to show that the decline of infectious diseases caused a substantial decline of chronic diseases and contributed more to increasing life expectancy than advances in the treatment of chronic diseases.

Physiological aging and life-cycle labor supply across countries.

We construct a cohort-based frailty index for 180 countries over the period 1990-2019. We use this measure of physiological aging to estimate the impact of deteriorating health on labor force participation. Our three-dimensional panel framework, in which the unit of observation is a cohort in a given country at a given age, allows us to control for a range of unobserved factors. Our identification strategy further exploits a compensating law of physiological aging to account for reverse causality. We find a negative effect of physiological aging on labor market participation: an increase of the frailty index by one percent leads to a reduction of labor force participation of about 0.6 (±0.2) percentage points. Since health deficits (in the frailty index) are accumulated at a rate of about 3 percent per year of life, almost all of the age-related decline in labor force participation can be motivated by deteriorating health.

Hooked on weight control: An economic theory of anorexia nervosa and its impact on health and longevity.

In this paper, I integrate a theory of body image, weight control, and addiction in a life cycle model with health deficit accumulation in order to explain the phenomenon of anorexia nervosa and its impact on health and longevity. Individuals consume normal goods and foods and can work off excess calories with physical exercise. There exists a healthy body mass index and deviations from it increasingly cause health deficits due to obesity or underweight. There exists also a subjective target weight and being heavier than target weight causes a loss of utility from body image. Anorexia is initiated in individuals who are particularly successful in weight control and prone to addiction. Addiction to weight control motivates anorexic individuals to perpetually adjust their target weight downwards and to eat less and exercise more. With declining weight, health deficits accumulate faster and mortality risk rises. I calibrate the model to an average American woman with bmi 28. Due to weight loss addiction, the bmi declines to a level of 15 and causes an expected loss of 15 years of life. I also discuss potential therapies and recovery from the disease.

Physiological aging around the World.

We extract data on physiological aging by computing a frailty index for 201 countries over the period 1990-2019. Using panel estimation techniques, we show that the macro frailty index replicates basic regularities previously observed in related studies of aging at the individual level. We then use the frailty index to highlight trends of global physiological aging and its relationship to economic growth. Holding population age structure fixed, the global frailty index has on average increased by about 2 percent over the last 30 years. The average person has therefore aged by what corresponds to about one life-year of physiological aging. This overall trend is relatively similar across different geographical regions. We also document a negative relationship between physiological aging of the workforce and economic growth. According to our preferred specification, a one percent increase in the frailty index of the workforce is associated with a 1.5 percent decline of GDP per capita. This means that average annual growth of labor productivity would have been 0.1 percentage points higher without physiological aging in the period 1990-2019.

A health economic theory of occupational choice, aging, and longevity.

In this paper, I propose a life cycle model of occupational choice with endogenous health behavior, aging, and longevity. Health-demanding work leads to a faster accumulation of health deficits and is remunerated with a hazard markup on wages. Health deficit accumulation is also influenced by unhealthy consumption and health care expenditure. I calibrate the model for a 20 year old average American in 2010 and show the following results, among others. Health-demanding work is ceteris paribus preferred by male, young, and healthy individuals with a relatively low level of education. Health demanding work has a negligible effect on health behavior because income and health investment effects largely offset each other, implying that health effects can be attributed almost fully to the direct health burden of work. Better medical technology induces low-skilled individuals to spend a greater part of their life in health-demanding work and thus increases the health gradient of education. High wealth endowments protect against unhealthy occupational choices. I show robustness of the results in an extension of the model with regard to endogenous retirement.

The impact of menstruation hygiene management on work absenteeism of women in Burkina Faso.

Women in developing countries face challenges in terms of managing their menstrual hygiene. They often do not possess the appropriate means, materials, or have access to suitable facilities. Using a newly released dataset for Burkina Faso and propensity score matching, we provide for the first time evidence of the impact of advanced menstrual hygiene management on work attendance. We show that the use of disposable sanitary pads rather than old cloth reduces work absenteeism of women by approximately 24% points. We report the robustness of the results with respect to alternative specifications of the propensity score model and investigate the results for samples stratified by education, wealth, marital status, and religion.

Time-inconsistent health behavior and its impact on aging and longevity.

We integrate time-inconsistent decision making due to hyperbolic discounting into a gerontologically founded life cycle model with endogenous aging and longevity. Individuals can slow down aging and postpone death by health investments and by reducing unhealthy consumption, conceptualized as smoking. We show that individuals continuously revise their original plans to smoke less and invest more in their health. Consequently, they accumulate health deficits faster and die earlier than originally planned. This fundamental health consequence of time-inconsistency has not been addressed in the literature so far. Because death is endogenous, any attempt to establish the time-consistent first-best solution by manipulating the first order conditions through (sin-) taxes and subsidies is bound to fail. We calibrate the model with U.S. data for an average American in the year 2012 and estimate that time-inconsistent health behavior causes a loss of about 4 years of life. We show how price policy can nudge individuals to behave more healthy such that they actually realize the longevity and value of life planned at age 20.

From pain patient to junkie: An economic theory of painkiller consumption and its impact on wellbeing and longevity.

In this paper, I propose a life cycle model of painkiller consumption that combines the theory of health deficit accumulation with the theory of addiction. Chronic pain is conceptualized as a persistent negative shock to lifetime utility that can be treated by pain relief medication. Individuals treated with opioid pain relievers (OPR) develop addiction, which increases their demand for opioids and reduces their welfare and life expectancy through side effects and potential overdose. I calibrate the model for a benchmark American and investigate the comparative dynamics of alternative drug characteristics, pain intensities, and ages of onsets of pain as well as their implications for welfare and life expectancy. Computational experiments are used to identify fully rational and imperfectly rational addiction behavior. Fully rational addicts reduce OPR use when new information about the addictive potential of these drugs arrives. Imperfectly rational addicts further develop their addiction and switch to illicit opioid use. Likewise, a discontinued prescription helps fully rational addicts to quit quickly, while it induces imperfectly rational individuals to take up heroin. I also discuss treatment of OPR addiction and the use of opioids in palliative care.

Opioid epidemics.

In this paper, I propose an economic theory that addresses the epidemic character of opioid epidemics. I consider a community in which individuals are heterogenous with respect to the experience of chronic pain and susceptibility to addiction and live through two periods. In the first period they consider whether to treat pain with opioid pain relievers (OPRs). In the second period they consider whether to continue non-medical opioid use to mitigate cravings from addiction. Non-medical opioid use is subject to social disapproval, which depends negatively on the share of opioid addicts in the community. An opioid epidemic is conceptualized as the transition from an equilibrium at which opioid use is low and addiction is highly stigmatized to an equilibrium at which opioid use is prevalent and social disapproval is low. I show how such a transition is initiated by the wrong belief that OPRs are not very addictive. Under certain conditions there exists an opioid trap such that the community persists at the equilibrium of high opioid use after the wrong belief is corrected. Refinements of the basic model consider the recreational use of prescription OPRs and an interaction between income, pain, and addiction.

Season of birth, health and aging.

We investigate how the season of birth is related to human health and aging. For this purpose, we use five waves of the Survey of Health, Aging, and Retirement in Europe (SHARE) dataset and construct a health deficit index for 21 European countries. Results from log-linear regressions suggest that, on average, elderly European men age faster when they were born in spring and summer (compared to autumn). At any given age, they have developed about 3.5 percent more health deficits. These differences due to seasons of birth are not mediated by body height and education. In a subsample of Southern European countries, where the seasonal variation of sunlight is smaller, the birth season plays an insignificant role for health in old age. In a subsample of Northern countries, in contrast, the season of birth coefficients increase. At any given age, elderly Northern European men born in spring have developed, on average, 8.7 percent more health deficits than those born in autumn. In non-linear regressions we find that the speed of aging is also associated with the birth season.

Limited self-control and longevity.

This paper proposes a new framework to discuss self-control problems in the context of life-cycle health and longevity. Individual decisions are conceptualized as the partial control of impulsive desires of a short-run self by a rationally forward-looking long-run self. The short-run self strives for immediate gratification through consumption of health-neutral and unhealthy goods. The long-run self reflects the long-term consequences of unhealthy behavior on health outcomes and longevity and invests time and money to improve current and future health. The model is calibrated with data from the United States and used to provide an assessment of the impact of imperfect self-control on unhealthy consumption, health investments, lifetime health, and the age at death.

Smoking kills: An economic theory of addiction, health deficit accumulation, and longevity.

In this paper I unify the economic theories of addiction and health deficit accumulation and develop a life cycle theory in which individuals take into account the fact that the consumption of addictive goods reduces their health and longevity. I distinguish two types of addiction: sophisticated and naive. Individuals with sophisticated addiction perfectly control their addiction. Individuals with naive addiction, though otherwise rational and forward looking, fail to fully understand how their addiction develops. I argue that the life cycle consumption pattern predicted for naive addiction is more suitable for motivating empirically observable patterns of addictive goods consumption. I take the case of smoking as unhealthy behavior, calibrate the model with U.S. data, and apply it in order to investigate the life cycle patterns of smoking and quitting smoking and the socioeconomic gradients of unhealthy consumption and longevity.

Patterns of frailty in older adults: comparing results from higher and lower income countries using the Survey of Health, Ageing and Retirement in Europe (SHARE) and the Study on Global AGEing and Adult Health (SAGE).

We use the method of deficit accumulation to describe prevalent and incident levels of frailty in community-dwelling older persons and compare prevalence rates in higher income countries in Europe, to prevalence rates in six lower income countries. Two multi-country data collection efforts, SHARE and SAGE, provide nationally representative samples of adults aged 50 years and older. Forty items were used to construct the frailty index in each data set. Our study shows that the level of frailty was distributed along the socioeconomic gradient in both higher and lower income countries such that those individuals with less education and income were more likely to be frail. Frailty increased with age and women were more likely to be frail in most countries. Across samples we find that the level of frailty was higher in the higher income countries than in the lower income countries.

Declining fertility and economic well-being: do education and health ride to the rescue?

It is widely argued that declining fertility slows the pace of economic growth in industrialized countries through its negative effect on labor supply. There are, however, theoretical arguments suggesting that the effect of falling fertility on effective labor supply can be offset by associated behavioral changes. We formalize these arguments by setting forth a dynamic consumer optimization model that incorporates endogenous fertility as well as endogenous education and health investments. The model shows that a fertility decline induces higher education and health investments that are able to compensate for declining fertility under certain circumstances. We assess the theoretical implications by investigating panel data for 118 countries over the period 1980 to 2005 and show that behavioral changes partly mitigate the negative impact of declining fertility on effective labor supply.