Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/170880
Authors: 
Bloom, David E.
Chen, Simiao
Kuhn, Michael
McGovern, Mark E.
Oxley, Les
Prettner, Klaus
Year of Publication: 
2017
Series/Report no.: 
IZA Discussion Papers 10896
Abstract: 
We propose a novel framework to analyse the macroeconomic impact of non-communicable diseases. We incorporate measures of disease prevalence into a human capital augmented production function, which enables us to determine the economic costs of chronic health conditions in terms of foregone gross domestic product (GDP). Unlike previously adopted frameworks, this approach allows us to account for i) variations in human capital for workers in different age groups, ii) mortality and morbidity effects of non-communicable diseases, and iii) the treatment costs of diseases. We apply our methodology to China, Japan, and South Korea, and estimate the economic burden of chronic conditions in five domains (cardiovascular diseases, cancer, respiratory diseases, diabetes, and mental health conditions). Overall, total losses associated with these non-communicable diseases over the period 2010-2030 are $16 trillion for China (measured in real USD with the base year 2010), $5.7 trillion for Japan, and $1.5 trillion for South Korea. Our results also highlight the limits of cost-effectiveness analysis by identifying some intervention strategies to reduce disease prevalence in China that are cost beneficial and therefore a rational use of resources, though they are not cost-effective as judged by conventional thresholds.
Subjects: 
non-communicable diseases
human capital
health interventions
aggregate output
ageing
East Asia
JEL: 
H51
I15
I18
J24
O11
Document Type: 
Working Paper

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