'Three Hours of Life per Euro'

Public spending increased life expectancy in eastern Germany:

Three hours of life per euro, EurekAlert: Public spending appears to have contributed substantially to the fact that life expectancy in eastern Germany has not only increased, but is now almost equivalent to life expectancy in the west. While the possible connection of public spending and life expectancy has been a matter of debate, scientists at the Max Planck Institute for Demographic Research (MPIDR) have now for the first time quantified the effect. They found that for each additional euro the eastern Germans received in benefits from pensions and public health insurance after reunification, they gained on average three hours of life expectancy per person per year.

These are the conclusions of an analysis based on a newly developed set of age-specific data on public expenditures through the year 2000. MPIDR demographer Tobias Vogt published the results of the analysis recently in the scientific journal Journal of the Economics of Ageing. ...

"What has often been called an explosion in social spending in the wake of reunification has, however, led to a gratifying jump in life expectancy," says Tobias Vogt. ...

Additional expenditures by the health care system were found to have had a greater impact on life expectancy than higher pensions... However, Vogt observed, "without the pension payments of citizens in east and west converging to equivalent levels, the gap in life expectancy could not have been closed." This is because when there are no differences in the quality and level of medical care, the standard of living becomes the decisive factor in life expectancy. And the standard of living of older people is determined to a large extent by the size of their pensions. ...