Latest / The Demographics Podcast with Fexingo: Aging Populations, Birth Rates, and Economic Impact / The Neighborhood Lottery of Longevity
Transcript
- Lucas: So here's a number that stopped me this week: there is a twenty-year gap in life expectancy between two census tracts in Chicago that are about nine miles apart. Luna: Twenty years — that's the difference between living into your mid-80s and dying in your mid-60s, just based on where you live. Lucas: Exactly. And it's not just Chicago. A 2024 study from the National Bureau of Economic Research mapped life expectancy at the neighborhood level across the entire U.S. and found that the gap between the top ten percent and bottom ten percent of neighborhoods is now over fifteen years. Luna: And that gap has been widening. I think the study showed that since 2001, the top neighborhoods gained about three years of life expectancy while the bottom neighborhoods gained basically nothing. Lucas: Correct. The bottom quintile actually saw a small decline in some urban areas. Which means we're not just talking about inequality in income or wealth — we're talking about inequality in the number of years you get to live. Luna: And that has huge economic implications. Social Security, for example — if you're a high earner in a wealthy neighborhood, you're collecting benefits into your late 80s. If you're a low earner in a disadvantaged neighborhood, you might not even reach full retirement age. Lucas: Yeah, the system effectively transfers money from the short-lived poor to the long-lived rich. The NBER study calculated that a man in the top income quartile who lives to 85 gets about $200,000 more in lifetime Social Security benefits than a man in the bottom quartile who dies at 70. Luna: And it's not just Social Security. Life insurance, annuities, pension funds — they all price based on average life expectancy, but the actual distribution is wildly different by neighborhood. Lucas: Right. So insurance companies have started using zip code-level data to set premiums. That's controversial, but it's also rational from an actuarial standpoint. A 65-year-old in a high-longevity neighborhood might live five to seven years longer than the national average — that changes the math on an annuity dramatically. Luna: It also changes how we think about retirement age. If we raise the retirement age to 70, that's a much bigger hit for someone in a neighborhood where life expectancy is 68. Lucas: And that's the kind of policy tension that doesn't get enough attention. The standard argument for raising the retirement age is 'people are living longer' — which is true on average. But the average is hiding a deeply unequal distribution. Luna: So what drives these gaps? The study pointed to a few things — healthcare access is obvious, but they also found that environmental factors like air quality and proximity to green space explained a lot of the variation. Lucas: Yeah, and chronic stress. The researchers measured something called 'allostatic load' — the physiological wear and tear from constant exposure to poverty, crime, and discrimination. That alone accounted for about 30 percent of the gap in some cities. Luna: And the really striking thing is that these effects compound. If you're born into a low-life-expectancy neighborhood, you're more likely to have chronic disease as a child, which affects your educational outcomes, which affects your income, which affects your healthcare as an adult. Lucas: It's a feedback loop. And it means that the longevity gap is self-reinforcing — unless something intervenes. There are some interesting place-based interventions being tried. Things like community health workers, lead abatement programs, and investments in walkable infrastructure. Luna: Yeah, and I think there's a growing recognition among economists that this is not just a social justice issue — it's a macroeconomic issue. If large segments of the population are dying young, that drags down labor force participation, productivity, and economic growth. Lucas: And it also distorts our measurements. GDP per capita looks fine, but if you adjust for life expectancy inequality, the picture gets uglier. There's a concept called 'equivalent income' that tries to account for longevity differences — and by that measure, the U.S. has been falling behind other developed countries since the early 2000s. Luna: That's a really sobering thought. And it ties back to something you mentioned earlier — the idea that the zip code is now a better predictor of health than genetic code. Lucas: That's actually a line from a 2019 study in JAMA. And it's become almost a truism in public health. But the economic angle is still underappreciated. I think part of the reason is that the data is so granular — it's hard for national policymakers to act on census tract level variation. Luna: But some cities are starting to. I know Los Angeles launched a 'Health Atlas' that maps life expectancy by neighborhood and ties it to zoning and transportation funding decisions. Lucas: And there's a private-sector angle too. Some large employers have started offering location-adjusted health benefits — like higher subsidies for gym memberships or healthy food delivery in neighborhoods with high obesity rates. Luna: Which raises the question: should we be targeting places instead of people? A lot of social programs are means-tested at the individual level, but maybe the most efficient way to improve longevity is to improve the neighborhood itself. Lucas: That's the argument behind 'place-based' policy. And it's gaining traction. The Biden administration's Justice40 initiative, which directs 40 percent of certain federal investments to disadvantaged communities, is essentially a place-based longevity policy. Luna: But those investments take time to show results. In the meantime, the gap keeps widening. And the demographic implications are huge — we're going to have an aging population overall, but the aging will be very unevenly distributed. Lucas: Yeah, some neighborhoods will become 'longevity enclaves' — places where people live well into their 90s — while others will see declining life expectancy and higher mortality at working ages. That's going to reshape everything from real estate markets to public transit planning. Luna: It also has implications for the concept of 'healthy aging.' If you're in a neighborhood with high pollution and low access to fresh food, you might live to 75, but the last decade of your life could be marked by chronic disease and disability. Lucas: Right — the 'healthspan' gap is even wider than the lifespan gap. The NBER study found that in the bottom quintile, the average person spends their final 12 years with a significant disability. In the top quintile, it's more like 6 years. Luna: Which has enormous implications for long-term care costs, family caregiving, and productivity. And it's not evenly distributed by race either — Black Americans have lower life expectancy and higher disability rates at every income level. Lucas: The study controlled for income and found that race still matters. That suggests there are additional factors — discrimination in healthcare, residential segregation, maybe even the cumulative effects of stress from systemic racism. Luna: So the policy response has to be multi-layered. Not just healthcare, but housing, environment, education, and economic opportunity. Lucas: And that's where economics comes back in. Because if you can quantify the cost of longevity inequality — in terms of lost productivity, higher healthcare spending, and reduced tax revenue — then you can make the case for investment. Luna: That's the kind of analysis that often gets overlooked. We talk about the 'longevity economy' in terms of products and services for older adults, but the flip side is the economic drag from premature death and disability. Lucas: So the next time you hear that life expectancy is rising, ask yourself: for whom? And where? Because the national average is becoming less and less meaningful. Luna: And for those of us who want to see more analysis like this — more data-driven, specific, and honest about the distribution — there's a way to support the show directly. Lucas: Yeah, if walking through the economy with us has made something click, a couple of dollars a month is genuinely what keeps these going. You can head to buy me a coffee dot com slash fexingo. Luna: It's a small thing, but it makes a real difference in keeping the show ad-free and independent. And we appreciate every bit of it. Lucas: So back to that Chicago gap — twenty years. That means a child born in one neighborhood could plausibly attend the funeral of a child born in another neighborhood nine miles away. That's not just a statistic. That's a moral and economic failure. Luna: And the question is: what are we going to do about it? Because the gap isn't closing on its own. Lucas: It's not. But the first step is seeing it clearly. And that's what we tried to do today.