Can we afford to be unhappy?

Unhappiness increases healthcare costs and public expenditures and restricts one's ability to work.

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Aging increases the likelihood of illness and disability, which in turn increases healthcare costs. As populations get older, healthcare expenditures are therefore expected to get bigger. In Denmark, for example, the oldest segment of the population (over-85) is expected to spend up to 320,000 nights in the hospital each year by 2050, roughly double the current figure of 126,000 (1).

Given these trendlines, it is perhaps no surprise that public spending has become a central feature in discussions surrounding demographic aging. Yet what is often missing from these conversations is the economic importance of subjective wellbeing. An emerging body of evidence has begun to demonstrate that healthcare costs are caused not only by old age, but also by unhappiness.

Recent studies in Canada have found that people with low life satisfaction are three times more likely to be among the heaviest users of healthcare services (2), and more likely to be admitted to the hospital than their happier counterparts (3). Such findings are also reflected in our study.

Unhappiness today predicts more hospital visits in the future

In our new report, Long and Happy Lives: The Future of Wellbeing in an Aging Society, we looked at how respondents who reported below-average life satisfaction in previous survey waves (2 years ago) reported increased healthcare consumption today. Our findings are based in part on survey data from more than 115,000 Europeans over the age of 50.

In almost every case, we find significant increases in healthcare use and public spending associated with past period unhappiness.

In Europe, older adults with below average life satisfaction are 34% more likely to visit a doctor, 23% more likely to be hospitalized, 58% more likely to experience a health problem that limits paid work, and 72% more likely to receive public assistance, two years later.

Why is unhappiness causing greater public spending?

The relationship between life satisfaction and healthcare consumption is hardly straightforward. The former can influence the latter through a number of different channels. The existing literature points to three primary mechanisms: 1. Risk behaviors: People with lower quality of life tend to exhibit more risk behaviors including smoking (4), physical inactivity (5), and unsafe driving (6). This can lead to higher rates of illness and accidents, thereby increasing healthcare expenditures.

2. Prevention: People with a greater sense of purpose in life are more likely to receive preventative health examinations (7). This allows for earlier detection of health problems, which can reduce hospitalization rates later on.

3. Genetics: Biological mechanisms may also play a contributing role. One meta-analysis noted that individuals with greater psychological wellbeing had more favorable lipid profiles – tests that can identify certain genetic diseases and determine risks of cardiovascular disease (8). In Figure 3, we assess the link between life satisfaction and economic burdens in terms of (1) doctor visits, (2) hospitalizations, (3) health problems that limit paid work, and (4) public assistance. Using logit regressions, we estimate the extent to which below average levels of life satisfaction among older adults increased the likelihood of each event two years later.

Our opinion: Investing in happiness pays off

“If we make the sorts of investments that improve life satisfaction, this should pay dividends by reducing hospitalizations and healthcare utilization in the long term.” Eric De Prophetis Analyst IHPME, University of Toronto

One of the most frequently cited concerns regarding demographic aging is the added pressure older populations are expected to place on public spending programs. In this article, we have attempted to bring a new perspective into the equation, one that sheds light on the importance of subjective wellbeing in evaluating and reducing economic burdens associated with life. Our analysis suggests at least two avenues by which subjective wellbeing could be incorporated into decision-making to help reduce spending. First, investing directly in solutions to raise wellbeing levels of older populations may not only produce higher levels of happiness, but also lower healthcare expenditures down the line. Second, incorporating life satisfaction and other subjective wellbeing measures into regular healthcare screening protocols may help to enable early detection of health risks, and provide opportunities to interrupt causal pathways that lead from unhappiness to healthcare consumption.

Bibliography

1. Estimates drawn from Statistics Denmark estimations. For more information, see: www.statistikbanken.dk/IND03

2. Goel et al. (2018).

3. De Prophetis et al. (2020).

4. Boehm et al. (2018).

5. Baruth et al. (2011); Kim et al. (2017).

6. Goudie et al. (2014).

7. Kim et al. (2014).

8. Soo et al. (2018).

About the study

Long and Happy Lives: The Future of Wellbeing in an Aging Society is a cross-national study based on data on more than 115,000 respondents from 18 European countries. It is authored by Michael Birkjær and Micah Kaats from The Happiness Research Institute. The report is commissioned by DaneAge (A Danish not-for-profit organization with more than 900,000 members).

Read the report

Long and Happy Lives: The Future of Wellbeing in an Aging Society

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