Frailty, mortality, and the demand for medical care

This paper proposes a theory of aging and longevity according to which the probability to survive at any age depends on the number of health deficits accumulated, as suggested by modern biology. I calibrate the model for a reference U.S. citizen and exploit the fact that the association between health deficits and mortality has been estimated with great precision in gerontology. This allows me to use the model for quantitative experiments. I compare health expenditure, health deficits, and the value of life for richer and poorer individuals. The model motivates a strong socioeconomic gradient of health. It explains how income growth and advances in medical technology and the induced increase in health care demand led to large reductions in health deficits and roughly a doubling of the value of life at all ages.