Here is the abstract for my presentation at the upcoming Canadian Economics Association (CEA) conference in June 2012 in Calgary, Alberta, and at the Société canadienne de science économique (SCSE) conference in Mont-Tremblant, Québec :
Macroeconomic Consequences of Health Spending on Trends in Disability Among the Elderly (with Raquel Fonseca and Pierre-Carl Michaud)
Although disability has decreased among the elderly in the US, it could increase in the future due to the alarming trend in obesity and its consequences such as diabetes. This paper studies the macroeconomic impact of government interventions aiming to increase risk prevention in young agents. We introduce an overlapping generation model in which young, employed agents choose how much to save for retirement and invest in preventive care, while the elderly choose how much to spend on consumption and curative care. Calibrating our model on US data, we analyze the long-term welfare desirability and macroeconomic impact of government reforms of social security, co-payments for curative care and campaigns aiming to increase consumer awareness to health risks.