July 8, 2021
Activities: Health, Social Impact
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Demographics:
Annual ROI: 0.0%
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People who are unhealthy earn lower incomes, put away fewer dollars in savings, and accumulate less wealth over the years compared to those who are healthy, a new study published by the National Bureau of Economic Research found. The research, conducted by researchers at the University of Georgia and the Federal Reserve Bank of Chicago, found bad health can explain up to 40% of variation in lifetime utilities. Here’s what else it found:
• Healthy people accumulate more wealth over time and earn more money: They make about 28% more than unhealthy people over their lifetime.
• The average healthy 65-year-old with high school degree has $230,000 in wealth compared to $120,000 for an unhealthy 65-year-old with a high school degree.
• Unhealthy people work less: Participation in the labor supply among the healthy is at 90% while participation for unhealthy people is 70%
Poor health affects individuals in four ways, the study found: By decreasing productivity, making individuals less useful at work, lowers survival probability, and increases medical spending. Long-term unhealthy people are also less patient and have a lower propensity to save, the study said, affecting long-term goals and financial stability.
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