Few factors can have greater effect on an economy than demographic change. We have seen this in the United States, where the population more than doubled during my mother’s life, and in Brazil, where it has nearly quadrupled during my own.
Now the United States and other industrialized nations face low birth rates and aging populations. Longer life spans will pose a huge challenge to society in the United States and other countries over the next few decades.
But demographics is an area where even well-educated people get tripped up by apparently simple concepts, such as life expectancy. That does not help in forming equitable and efficient public policy responses to rapidly growing or rapidly aging populations.
Consider the following simple and apparently illogical assertion: Most people live much longer than average.
That is true in poor countries, as well as here in the United States and other wealthy industrialized nations. It usually has been true for hundreds of years.
It is not a result of modern pharmaceuticals, genetic engineering or laser surgery. Rather, it happens because most deaths are clustered at the beginning, as well as the end, of what people think of as a normal life span. But the simple arithmetic of averages ends up confusing many people.
What I refer to here are common misperceptions about what demographers call “life expectancy.” This is the age to which a person of a specified age statistically can expect to survive, calculated in a given year. The general public usually interprets this figure as the average age to which people live. This is not exactly the same thing, but it is close enough for many practical purposes.
“So,” you may wonder, “how can most people live longer than average?” “Most” implies more than half. Wouldn’t half of all people live less than average and half live more? The answer is: usually not, because the average we are talking about here is the mean and not the median.
To compute a mean life span we would add up the life spans of all people and divide by the number of people. To find the median, we would rank the spans from shortest to longest and then find the midpoint or age before which exactly half of all people died and after which the other half died. That would be the median. The mean and the median are not the same, since people have the same probability of dying at every different age.
Throughout human existence, more people have died in the first few years of life than at many succeeding ages. Where many diseases are endemic, water contaminated and nutrition are tenuous, a fourth or more of all babies born alive commonly die before their fifth birthday. When a substantial minority of people die at very early ages, most of the surviving majority live well beyond the mean age of death for the group.
A practical example of misunderstanding this principle involves Social Security. In the past few years I frequently have heard the following argument: “When Social Security payments started in 1940, the normal retirement age was set at 65. But life expectancy then was less than 64 years.” So far, so good, but pay attention to the failure of logic that usually follows: “Therefore hardly anyone lived long enough to collect.”
Wrong! In 1940, life expectancy at birth was only 63.6 years, compared to 75.1 in 1990. But the main reason it was so low was continued high rates of infant and young child mortality. A large majority of people who made it to age 5 also made it to age 65. Life expectancy at age 65 was already a robust 77.7 years in 1940. The beneficiaries of the new program could expect to draw payments for an average of 12 years.
Indeed, while life expectancy at birth increased about 12 years over the half century following 1940, life expectancy at 65 increased by only four years, to age 81.8. This is due to the fact that well into the 20th century, life spans increased more by medicine preventing relatively few deaths early in life than from adding extra years to many people’s retirement.
Much of the reduction in child mortality took effect by 1960. Since then, additions to U.S. life expectancy at 65 have contributed about half of the total increase in life expectancy at birth. While this also is true in many other industrialized countries, the phenomenon of life expectancies increasing due to better health for older adults rather than for children is virtually unprecedented in human history.
Despite the popular perception that life is getting worse for the poor in developing countries, life expectancies have increased substantially over the past four decades in most of Latin America and Asia. Most of this improvement is due to the same factor that increased life spans in Europe and North America a century ago: access to clean drinking water.
There are exceptions to this general pattern. Several countries in sub-Saharan Africa see life expectancies dropping due to deaths from AIDS. Life expectancies also have dropped in Russia since 1990. This largely is due to increased male mortality due to alcohol abuse.
Life is a joy, and we should be glad that most people are living longer than their parents or grandparents. We can take extra satisfaction in knowing that most people will live longer than average.
© 2000 Edward Lotterman
Chanarambie Consulting, Inc.