Health and Economic Growth: Reconciling the Micro and Macro Evidence.

Economists use micro-based and macro-based approaches to assess the macroeconomic return to population health. The macro-based approach tends to yield estimates that are either negative and close to zero or positive and an order of magnitude larger than the range of estimates derived from the micro-based approach. This presents a micro-macro puzzle regarding the macroeconomic return to health. We reconcile the two approaches by controlling for the indirect effects of health on income per capita, which macro-based approaches usually include but micro-based approaches deliberately omit when isolating the direct income effects of health. Our results show that the macroeconomic return to health lies in the range of plausible microeconomic estimates, demonstrating that both approaches are in fact consistent with one another.

The global economic burden of chronic obstructive pulmonary disease for 204 countries and territories in 2020-50: a health-augmented macroeconomic modelling study.

BACKGROUND: Chronic obstructive pulmonary disease (COPD) is the third leading cause of death worldwide and imposes a substantial economic burden. Gaining a thorough understanding of the economic implications of COPD is an important prerequisite for sound, evidence-based policy making. We aimed to estimate the macroeconomic burden of COPD for each country and establish its distribution across world regions. METHODS: In this health-augmented macroeconomic modelling study we estimated the macroeconomic burden of COPD for 204 countries and territories over the period 2020-50. The model accounted for (1) the effect of COPD mortality and morbidity on labour supply, (2) age and sex specific differences in education and work experience among those affected by COPD, and (3) the impact of COPD treatment costs on physical capital accumulation. We obtained data from various public sources including the Global Burden of Disease Study 2019, the World Bank database, and the literature. The macroeconomic burden of COPD was assessed by comparing gross domestic product (GDP) between a scenario projecting disease prevalence based on current estimates and a counterfactual scenario with zero COPD prevalence from 2020 to 2050. FINDINGS: Our findings suggest that COPD will cost the world economy INT$4·326 trillion (uncertainty interval 3·327-5·516; at constant 2017 prices) in 2020-50. This economic effect is equivalent to a yearly tax of 0·111% (0·085-0·141) on global GDP. China and the USA face the largest economic burdens from COPD, accounting for INT$1·363 trillion (uncertainty interval 1·034-1·801) and INT$1·037 trillion (0·868-1·175), respectively. INTERPRETATION: The macroeconomic burden of COPD is large and unequally distributed across countries, world regions, and income levels. Our study stresses the urgent need to invest in global efforts to curb the health and economic burdens of COPD. Investments in effective interventions against COPD do not represent a burden but could instead provide substantial economic returns in the foreseeable future. FUNDING: Alexander von Humboldt Foundation, National Natural Science Foundation of China, CAMS Innovation Fund for Medical Science, Chinese Academy of Engineering project, Chinese Academy of Medical Sciences and Peking Union Medical College project, and Horizon Europe. TRANSLATIONS: For the Chinese and German translations of the abstract see Supplementary Materials section.

Estimates and Projections of the Global Economic Cost of 29 Cancers in 204 Countries and Territories From 2020 to 2050.

Importance: Cancers are a leading cause of mortality, accounting for nearly 10 million annual deaths worldwide, or 1 in 6 deaths. Cancers also negatively affect countries' economic growth. However, the global economic cost of cancers and its worldwide distribution have yet to be studied. Objective: To estimate and project the economic cost of 29 cancers in 204 countries and territories. Design, Setting, and Participants: A decision analytical model that incorporates economic feedback in assessing health outcomes associated with the labor force and investment. A macroeconomic model was used to account for (1) the association of cancer-related mortality and morbidity with labor supply; (2) age-sex-specific differences in education, experience, and labor market participation of those who are affected by cancers; and (3) the diversion of cancer treatment expenses from savings and investments. Data were collected on April 25, 2022. Main Outcomes and Measures: Economic cost of 29 cancers across countries and territories. Costs are presented in international dollars at constant 2017 prices. Results: The estimated global economic cost of cancers from 2020 to 2050 is $25.2 trillion in international dollars (at constant 2017 prices), equivalent to an annual tax of 0.55% on global gross domestic product. The 5 cancers with the highest economic costs are tracheal, bronchus, and lung cancer (15.4%); colon and rectum cancer (10.9%); breast cancer (7.7%); liver cancer (6.5%); and leukemia (6.3%). China and the US face the largest economic costs of cancers in absolute terms, accounting for 24.1% and 20.8% of the total global burden, respectively. Although 75.1% of cancer deaths occur in low- and middle-income countries, their share of the economic cost of cancers is lower at 49.5%. The relative contribution of treatment costs to the total economic cost of cancers is greater in high-income countries than in low-income countries. Conclusions and Relevance: In this decision analytical modeling study, the macroeconomic cost of cancers was found to be substantial and distributed heterogeneously across cancer types, countries, and world regions. The findings suggest that global efforts to curb the ongoing burden of cancers are warranted.

Beyond GDP: Using healthy lifetime income to trace well-being over time with estimates for 193 countries.

We measure well-being across 193 countries from 1990 to 2019 using a new indicator: healthy lifetime income (HLI). Apart from the income component as captured by standard per capita gross domestic product, HLI incorporates health as a second important component. Overall, HLI can be interpreted as the income of the average person in an economy during the years in which the person is in good health. We show that HLI has particular strengths as compared with other measures such as the Human Development Index. These include requiring only easily accessible data for its construction, having an immediate economic interpretation and unit of measurement, not needing the application of arbitrary weights of subcomponents, and not being bounded from above. As compared with using per capita gross domestic product as a metric for well-being, we find that countries with better population health tend to fare better in the rankings. This provides a rationale for investments in health and helps shift the focus from material well-being (as an instrumental indicator of well-being) toward health (as an intrinsic goal).

Macro-level efficiency of health expenditure: Estimates for 15 major economies.

The coronavirus disease 2019 (COVID-19) pandemic highlights the importance of strong and resilient health systems. Yet how much a society should spend on healthcare is difficult to determine because additional health expenditures imply lower expenditures on other types of consumption. Furthermore, the welfare-maximizing ("efficient") aggregate amount and composition of health expenditures depend on efficiency concepts at three levels that often get blurred in the debate. While the understanding of efficiency is good at the micro- and meso-levels-that is, relating to minimal spending for a given bundle of treatments and to the optimal mix of different treatments, respectively-this understanding rarely links to the efficiency of aggregate health expenditure at the macroeconomic level. While micro- and meso-efficiency are necessary for macro-efficiency, they are not sufficient. We propose a novel framework of a macro-efficiency score to assess welfare-maximizing aggregate health expenditure. This allows us to assess the extent to which selected major economies underspend or overspend on health relative to their gross domestic products per capita. We find that all economies under consideration underspend on healthcare with the exception of the United States. Underspending is particularly severe in China, India, and the Russian Federation. Our study emphasizes that the major and urgent issue in many countries is underspending on health at the macroeconomic level, rather than containing costs at the microeconomic level.

The economic burden of COVID-19 in the United States: Estimates and projections under an infection-based herd immunity approach.

OBJECTIVES: To assess the economic burden of COVID-19 that would arise absent behavioral or policy responses under the herd immunity approach in the United States and compare it to the total burden that also accounts for estimates of the value of lives lost. METHODS: We use the trajectories of age-specific human and physical capital in the production process to calculate output changes based on a human capital-augmented production function. We also calculate the total burden that results when including the value of lives lost as calculated from mortality rates of COVID-19 and estimates for the value of a statistical life in the United States based on studies assessing individual's willingness to pay to avoid risks. RESULTS: Our results indicate that the GDP loss associated with unmitigated COVID-19 would amount to a cumulative US$1.4 trillion by 2030 assuming that 60 percent of the population is infected over three years. This is equivalent to around 7.7 percent of GDP in 2019 (in constant 2010 US$) or an average tax on yearly output of 0.6 percent. After applying the value of a statistical life to account for the value of lives lost, our analyses show that the total burden can mount to between US$17 and 94 trillion over the next decade, which is equivalent to an annual tax burden between 8 and 43 percent. CONCLUSION: Our results show that the United States would incur a sizeable burden if it adopted a non-interventionist herd immunity approach. FUNDING: Research reported in this paper was supported by the Alexander von Humboldt Foundation, the Bill & Melinda Gates Foundation (Project INV-006261), and the Sino-German Center for Research Promotion (Project C-0048), which is funded by the German Research Foundation (DFG) and the National Natural Science Foundation of China (NSFC). Preparation of this article was also supported by the Value of Vaccination Research Network (VoVRN) through a grant from the Bill & Melinda Gates Foundation (Grant OPP1158136). The content is solely the responsibility of the authors.

Climate and the spread of COVID-19.

Visual inspection of world maps shows that coronavirus disease 2019 (COVID-19) is less prevalent in countries closer to the equator, where heat and humidity tend to be higher. Scientists disagree how to interpret this observation because the relationship between COVID-19 and climatic conditions may be confounded by many factors. We regress the logarithm of confirmed COVID-19 cases per million inhabitants in a country against the country's distance from the equator, controlling for key confounding factors: air travel, vehicle concentration, urbanization, COVID-19 testing intensity, cell phone usage, income, old-age dependency ratio, and health expenditure. A one-degree increase in absolute latitude is associated with a 4.3% increase in cases per million inhabitants as of January 9, 2021 (p value < 0.001). Our results imply that a country, which is located 1000 km closer to the equator, could expect 33% fewer cases per million inhabitants. Since the change in Earth's angle towards the sun between equinox and solstice is about 23.5°, one could expect a difference in cases per million inhabitants of 64% between two hypothetical countries whose climates differ to a similar extent as two adjacent seasons. According to our results, countries are expected to see a decline in new COVID-19 cases during summer and a resurgence during winter. However, our results do not imply that the disease will vanish during summer or will not affect countries close to the equator. Rather, the higher temperatures and more intense UV radiation in summer are likely to support public health measures to contain SARS-CoV-2.

Revisiting the association between temperature and COVID-19 transmissibility across 117 countries.

There is a robust and significant negative association between #COVID19 transmissibility and ambient temperature at the country level. An increase of 1°C in temperature is associated with a decrease in the prevalence of COVID-19 by ∼5.4%. https://bit.ly/32OTBiS.

COVID-19 and climate: global evidence from 117 countries.

Visual inspection of world maps shows that coronavirus disease 2019 (COVID-19) is less prevalent in countries closer to the equator, where heat and humidity tend to be higher. Scientists disagree how to interpret this observation because the relationship between COVID-19 and climatic conditions may be confounded by many factors. We regress confirmed COVID-19 cases per million inhabitants in a country against the country's distance from the equator, controlling key confounding factors: air travel, distance to Wuhan, testing intensity, cell phone usage, vehicle concentration, urbanization, and income. A one-degree increase in absolute latitude is associated with a 2.6% increase in cases per million inhabitants (p value <0.001). The Northern hemisphere may see a decline in new COVID-19 cases during summer and a resurgence during winter.

Noncommunicable Diseases Attributable To Tobacco Use In China: Macroeconomic Burden And Tobacco Control Policies.

Smoking causes health problems for individuals and imposes a sizable macroeconomic burden on countries. As the world's leading tobacco producer and consumer, China is at the epicenter of this health crisis. However, no studies have examined the macroeconomic burden of all relevant noncommunicable diseases (NCDs) attributable to tobacco or secondhand smoke exposure. We assessed how tobacco-attributable NCDs affect China's productive capacity and estimated that these diseases would impose a total cost of 16.7 trillion yuan (US$2.3 trillion, in constant 2018 prices) in the period 2015-30, which corresponds to an annual tax of 0.9 percent on aggregate income. Secondhand smoke exposure accounts for 14 percent of the burden. If China raised the tax on cigarettes to 75 percent of their retail price and implemented wide-ranging tobacco-control policies, the Chinese economy could save 7.1 trillion yuan (US$1.0 trillion) for 2015-30-the equivalent of adding a 0.4 percent dividend annually.

The global macroeconomic burden of road injuries: estimates and projections for 166 countries.

BACKGROUND: Road injuries are among the ten leading causes of death worldwide and also impede economic wellbeing and macroeconomic performance. Beyond medical data on the incidence of road injuries and their resulting morbidity and mortality, a detailed understanding of their economic implications is a prerequisite for sound, evidence-based policy making. We aimed to determine global macroeconomic costs of road traffic injuries and their cross-country distribution. METHODS: We calculated the economic burden of all road traffic-related injuries for 166 countries by use of a macroeconomic model that accounts for the effect of fatal and non-fatal injuries on labour supply, age-specific differences in education and experience of those who are affected by road accidents, and the diversion of injury-related treatment expenses from savings, which results in lower investment. FINDINGS: We estimated that road injuries will cost the world economy US$1·8 trillion (constant 2010 US$) in 2015-30, which is equivalent to an annual tax of 0·12% on global gross domestic product. Although low-income and middle-income countries have the largest health burden, their share of the economic burden of road injuries is only 46·4% of the global loss, reflecting in part higher productivity (and earnings) in high-income countries, but also prominently higher treatment costs. Our results also indicate that treatment costs account for a greater proportion of the economic burden in high-income countries than in low-income countries. INTERPRETATION: The macroeconomic burden of road injuries is sizeable and distributed unequally across countries and world regions. This finding suggests a case for nuanced policy making. Our framework should provide a good starting point for the more detailed analysis of policies both at country level and across different countries. FUNDING: National Institute on Aging.

The macroeconomic burden of noncommunicable diseases in the United States: Estimates and projections.

We develop and calibrate a dynamic production function model to assess how noncommunicable diseases (NCDs) will affect U.S. productive capacity in 2015-2050. In this framework, aggregate output is produced according to a human capital-augmented production function that accounts for the effects of projected disease prevalence. NCDs influence the economy through the following pathways: 1) when working-age individuals die of a disease, aggregate output undergoes a direct loss because physical capital can only partially substitute for the loss of human capital in the production process. 2) If working-age individuals suffer from a disease but do not die from it, then, depending on the condition's severity, they tend to be less productive, might work less, or might retire earlier. 3) Current NCD interventions such as medical treatments and prevention require substantial resources. Part of these resources could otherwise be used for productive investments in infrastructure, education, or research and development. This implies a loss of savings across the population and hampers economy-wide physical capital accumulation. Our results indicate a total loss of USD94.9 trillion (in constant 2010 USD) due to all NCDs. Mental health conditions and cardiovascular diseases impose the highest burdens, followed by cancer, diabetes, and chronic respiratory diseases. In per capita terms, the economic burden of all NCDs in 2015-2050 is USD265,000. The total NCD burden roughly corresponds to an annual tax rate of 10.8% on aggregate income.

Growth and welfare effects of health care in knowledge-based economies.

We study the effects of labor intensive health care within a research and development (R&D) driven growth model with overlapping generations. Health care increases longevity, labor participation, and productivity, while it also diverts labor away from production and R&D. We examine under which conditions expanding health care enhances growth and welfare and establish mild conditions under which the provision of health care beyond the growth-maximizing level is Pareto superior.

Population aging and endogenous economic growth.

We investigate the consequences of population aging for long-run economic growth perspectives. Our framework incorporates endogenous growth models and semi-endogenous growth models as special cases. We show that (1) increases in longevity have a positive impact on per capita output growth, (2) decreases in fertility have a negative impact on per capita output growth, (3) the positive longevity effect dominates the negative fertility effect in case of the endogenous growth framework, and (4) population aging fosters long-run growth in the endogenous growth framework, while its effect depends on the relative change between fertility and mortality in the semi-endogenous growth framework.Electronic supplementary material The online version of this article (doi:10.1007/s00148-012-0441-9) contains supplementary material, which is available to authorized users.

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.