The Longevity Dividend

Earlier this week we explored how life extension will provide tremendous economic benefits in terms of the cost savings it will provide. But a longer-lived (healthy) population does more than cut costs; it produces net new wealth.

The longer we live, the richer we become both as individuals and a society. Our friend Sonia Arrison explains:

New technologies that will allow us to live even longer will pay economic dividends

...University of Chicago economists Kevin Murphy and Robert Topel have calculated that, for Americans, “gains in life expectancy over the century were worth over $1.2m per person to the current population.” They also found that “from 1970 to 2000, gains in life expectancy added about $3.2 trillion per year to national wealth.” These enormous numbers represent a spectacular accomplishment in terms of benefits. But aside from what life is valued at, it is also the case that real income grows with greater longevity.

Harvard economist David Bloom and Queen’s University economist David Canning show that if there are “two countries that are identical in all respects, except that one has a 5 year advantage in life expectancy,” then the “real income per capita in the healthier country will grow 0.3-0.5 per cent per year faster than in its less healthy counterpart.” While these percentages might look small, they are actually quite significant, especially when one considers that between the years of 1965 to 1990, countries experienced an average per capita income growth of 2 per cent per year. When countries only have an average growth of 2 per cent, an advantage of 0.5 per cent is quite the boost.

Now, those numbers are based only on a five year longevity advantage. What if a country had a 10, 20, or 30 year advantage? The growth may not continue on a linear basis, but if the general rule holds – a jump in life expectancy causes an increase in economic growth per capita – then having a longer-lived population would facilitate enormous differences in economic prosperity. This helps to explain why there is a movement among some academics and activists to urge the US Congress to spend more on anti-ageing research in order to create what they call a “longevity dividend”.
Sonia explores these issues in much greater detail in her wonderful book, 100 Plus: How the Coming Age of Longevity Will Change Everything, From Careers and Relationships to Family and Faith.

She also discussed these issues with Stephen and me on a recent edition of FastForward Radio. Give it a listen.

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