Europe’s Demographic Opportunity: Unlocking The Value Of Health Nicholas Eberstadt Henry Wendt Chair in Political Economy American Enterprise Institute Bruno Leoni Institute Milano, 8 June 2007

Figure 1 Western Europe v. U.S. Population Structure, 2005 Source: U.S. Census Bureau, International Data Base, available at bin/ipc/idbagg [accessed August 3, 2006].

Figure 2 Western Europe vs. U.S. Population Structure, 2030 Source: U.S. Census Bureau, International Data Base, available at bin/ipc/idbagg [accessed August 3, 2006].

Figure 3 The Age Distribution of Great Innovation Source: Benjamin Jones Age and Great Innovation (Working Paper 11359). Cambridge MA: National Bureau of Economic Research.

Source: World Development Indicators, 2003 Figure 4 Health Equals Wealth: LE vs PPP Per Capita GDP years US $

Healthy Life Expectancy Source: Organisation for Economic Co-operation and Development, Society at a Glance: OECD Social Indicators, 2005 Edition (Paris: OECD, 2005). Figure 5 Healthy Life Expectancy: Western Europe vs US

Figure 6 Odds of Not Surviving from Age 20 to Age 65: Western Europe vs US Note: Based on age-specific mortality schedules for the year 2002 Source: Human Mortality Database. University of California, Berkeley (USA), and Max Planck Institute for Demographic Research (Germany). Available at or (data downloaded on 12/21/06). Proportion of population that does not survive

Figure 7 US Consumption and Labor Earnings by Age*, Distinguishing private and public components (in kind transfers and prorated items like defense; cash benefits excluded) Labor earnings Total Consumption public private *2000 calculations Source: Ronald Lee, Global Population Ageing and its Economic Consequences (AEI Press, forthcoming)

Figure 8 Male Retirement Age v. Life Expectancy: France, Source: Human Mortality Database. University of California, Berkeley (USA), and Max Planck Institute for Demographic Research (Germany). Available at or (data downloaded on August 3, 2006) and Age of Withdrawal from the Labour Force in OECD Countries, Labor Market and Social Policy Occasional Papers No. 49, by Peter Scherer. January 11, 2002 Age (LE)

Figure 9 Labor Force Participation Rates: Europe vs. Non-Europe OECD, c.2004 Source: International Labor Organization, LABORSTA, available at Note: Data are for 2004, except for Italy (2005) Participation Rates

Figure 10 Population Change in W. Europe vs US: Source: U.S. Census Bureau, International Data Base, available at [accessed August 3, 2006]. Population Change

Figure 11 Incentives to Retire and Retirement Behavior 1. Difference in participation rates between the age groups and as a percentage of the participation rate of those aged years. 2. The implicit tax on working an additional year is the foregone transfer/pension income plus the additional pension contributions paid minus any increase in future pensions as a result of delayed retirement, all expressed as a share of income from work. The calculations in all cases take account of the "regular" old-age pension scheme but consider somewhat different early retirement pathways depending on the country in question or, where such schemes do not apply widely, no such pathways. Source: Strengthening Growth and Public Finances in an Era of Demographic Change, OECD May 13-14, 2004 Fall in male labour fonce participation between ages: and Implicit tax on continued work at ages 55-59*, per cent ISL JAP NOR SWE NZL USA AUS CAN CHE GBR IRL DEU PRT ESP AUT FRA BELITA FIN NLD LUX