Tim Miller

Evaluating the Performance of the Lee-Carter Method for Forecasting Mortality

Lee and Carter (LC) published a new statistical method for forecasting mortality in 1992. This paper examines its actual and hypothetical forecast errors, and compares them with Social Security forecast errors. Hypothetical historical projections suggest that LC tended to underproject gains, but by less than did Social Security. True e0 was within the ex ante 95% probability interval 97% of the time overall, but intervals were too broad up to 40 years and too narrow after 50 years. Projections to 1998 made after 1945 always contain errors of less than two years. Hypothetical projections for France, Sweden, Japan, and Canada would have done well. Changing age patterns of mortality decline over the century pose problems for the method.

Increasing longevity and medicare expenditures

Official Medicare projections forecast that the elderly population will be less healthy and more costly over the next century. This prediction stems from the use of age as an indicator of health status: increases in longevity are assumed to increase demand for health care as individuals survive to older and higher-use ages. In this paper I suggest an alternative approach, in which time until death replaces age as the demographic indicator of health status. Increases in longevity are assumed to postpone the higher Medicare use and costs associated with the final decade of life. I contrast the two approaches, using mortality forecasts consistent with recent projections from the U.S. Census Bureau and the Social Security Administration. The time-until-death method yields significantly lower-cost forecasts. The hypothetical cost savings from improved health are small, however, relative to the size of the Medicare solvency problem caused by population aging.

An Approach to Forecasting Health Expenditures, with Application to the U.S. Medicare System

OBJECTIVE To quantify uncertainty in forecasts of health expenditures. STUDY DESIGN Stochastic time series models are estimated for historical variations in fertility, mortality, and health spending per capita in the United States, and used to generate stochastic simulations of the growth of Medicare expenditures. Individual health spending is modeled to depend on the number of years until death. DATA SOURCES/STUDY SETTING A simple accounting model is developed for forecasting health expenditures, using the U.S. Medicare system as an example. PRINCIPAL FINDINGS Medicare expenditures are projected to rise from 2.2 percent of GDP (gross domestic product) to about 8 percent of GDP by 2075. This increase is due in equal measure to increasing health spending per beneficiary and to population aging. The traditional projection method constructs high, medium, and low scenarios to assess uncertainty, an approach that has many problems. Using stochastic forecasting, we find a 95 percent probability that Medicare spending in 2075 will fall between 4 percent and 18 percent of GDP, indicating a wide band of uncertainty. Although there is substantial uncertainty about future mortality decline, it contributed little to uncertainty about future Medicare spending, since lower mortality both raises the number of elderly, tending to raise spending, and is associated with improved health of the elderly, tending to reduce spending. Uncertainty about fertility, by contrast, leads to great uncertainty about the future size of the labor force, and therefore adds importantly to uncertainty about the health-share of GDP. In the shorter term, the major source of uncertainty is health spending per capita. CONCLUSIONS History is a valuable guide for quantifying our uncertainty about future health expenditures. The probabilistic model we present has several advantages over the high-low scenario approach to forecasting. It indicates great uncertainty about future Medicare expenditures relative to GDP.

Population Policy and Externalities to Childbearing

When individual couples make informed fertility decisions that reflect a concern for the future well-being of their own children, the aggregate demographic outcome should be both socially and individually optimal. This result depends on several assumptions, including the absence of externalities to childbearing—costs and benefits of children that fall on society at large without impinging on their parents directly or passing through markets. Four categories of externalities are here evaluated: reproductive dilution of collective wealth; cost spreading for public goods; public-sector intergenerational transfers—health, education, and pensions; and other governmental expenditures. Intergenerational transfers are found to create large positive externalities in industrial welfare states but small negative ones in Third World countries. Public goods lead to sizable positive externalities in both groups of countries. Other governmental expenditures lead to considerable negative externalities. Collective wealth in the form of publicly owned mineral reserves leads in some cases to enormous negative externalities, while in other cases it is of little importance. No evaluation is attempted for collective environmental wealth, scale returns, or induced technological change.

Racial and social class gradients in life expectancy in contemporary California

Life expectancy, or the estimated average age of death, is among the most basic measures of a populations health. However, monitoring differences in life expectancy among sociodemographically defined populations has been challenging, at least in the United States (US), because death certification does not include collection of markers of socioeconomic status (SES). In order to understand how SES and race/ethnicity independently and jointly affected overall health in a contemporary US population, we assigned a small-area-based measure of SES to all 689,036 deaths occurring in California during a three-year period (1999-2001) overlapping the most recent US census. Residence at death was geocoded to the smallest census area available (block group) and assigned to a quintile of a multifactorial SES index. We constructed life tables using mortality rates calculated by age, sex, race/ethnicity and neighborhood SES quintile, and produced corresponding life expectancy estimates. We found a 19.6 (+/-0.6) year gap in life expectancy between the sociodemographic groups with the longest life expectancy (highest SES quintile of Asian females; 84.9 years) and the shortest (lowest SES quintile of African-American males; 65.3 years). A positive SES gradient in life expectancy was observed among whites and African-Americans but not Hispanics or Asians. Age-specific mortality disparities varied among groups. Race/ethnicity and neighborhood SES had substantial and independent influences on life expectancy, underscoring the importance of monitoring health outcomes simultaneously by these factors. African-American males living in the poorest 20% of California neighborhoods had life expectancy comparable to that reported for males living in developing countries. Neighborhood SES represents a readily-available metric for ongoing surveillance of health disparities in the US.

Fiscal Externalities of Becoming a Parent

Theoretical and empirical results suggest that there are externalities to childbearing, but those results usually assume that these externalities accrue uniformly within a homogeneous population. We advance this argument by developing separate estimates of the fiscal externalities associated with parents—those who devote time or material resources to minor children—and nonparents. Our analysis uses data from the US Panel Study of income Dynamics on the age profiles of taxes paid and publicly funded benefits consumed by parents and nonparents, together with a previously developed intertemporal economic-demographic accounting model. The accounting framework takes into account the net fiscal impacts of future generations as well as the present population. Our findings indicate that, with a 3 percent discount rate, parents produce a substantial net fiscal externality, about

An EUV spectrometer for mapping the heliopause and solar wind

217,000 in 2009 dollars. This is equivalent to a lifetime annuity of nearly

Keck Planet Finder: preliminary design

8,100 per year beginning at age 18. The results are sensitive to both the discount rate used and the proportion of parents within the cohort.

Impact of optical distortions on fiber positioning in the dark energy spectroscopic instrument

The He+ ion provides a valuable tracer of solar wind dynamics and the heliospheric boundary. Mapping the heliosphere in the 30.4 nm resonance line of the He+ ion with high spectral resolution will open access to the heliopause and reveal the three-dimensional flow of the solar wind. The emission fluxes are however faint, just a few mR, which poses a serious limitation on the mapping rate at high signal-to-noise ratio. We have developed a spectrometer configuration for narrowband EUV emission that offers important advantages over previous designs: high throughput (~1cps/mR), high resolution (several thousand), no moving parts, and modest instrument size and mass. The concept combines a conventional normal-incidence Rowland mount grating and an efficient multilayer coating, with a microchannel plate detector performing two dimensional photon counting. One key innovation is the use of a large-area multi-slit at the spectrometer entrance. This multislit is a one dimensional sequence of open and opaque zones, against which pattern the accumulated spectral image can be correlated to recover the incident spectrum. The other innovation is arranging that each member of the multislit group is curved in such a way that the off-plane grating aberrations (which extend and rotate the image of each object point) do not introduce significant wavelength broadening. The curved slit arrangement yields a large well-corrected image field, and a high throughput for diffuse emission is achieved. The curved-multislit Rowland spectrometer may have a variety of other applications sensing diffuse fluxes with high spectral resolution.

Population Ageing, Demographic Dividend and Gender Dividend: Assessing the Long Term Impact of Gender Equality on Economic Growth and Development in Latin America

The Keck Planet Finder (KPF) is a fiber-fed, high-resolution, high-stability spectrometer in development for the W.M. Keck Observatory. The instrument recently passed its preliminary design review and is currently in the detailed design phase. KPF is designed to characterize exoplanets using Doppler spectroscopy with a single measurement precision of 0.5 m s−1 or better; however, its resolution and stability will enable a wide variety of other astrophysical pursuits. KPF will have a 200 mm collimated beam diameter and a resolving power greater than 80,000. The design includes a green channel (445 nm to 600 nm) and red channel (600 nm to 870 nm). A novel design aspect of KPF is the use of a Zerodur optical bench, and Zerodur optics with integral mounts, to provide stability against thermal expansion and contraction effects.