Book Review of Deaths of Despair and the Future of Capitalism, by Anne Case and Angus Deaton

Review by Elizabeth M. Jabek

In the Public Interest, November 2021

Deaths of Despair and the Future of Capitalism looks at the rising trend in deaths of despair in the U.S. and how our capitalist economy has fueled this trend. The term, “deaths of despair,” refers to deaths from drug overdoses, suicides, and alcoholic liver disease. This book provides a detailed analysis of the current rising trend in deaths of despair in the U.S. and the complex nature of the factors that have brought about this increase. It also raises cautionary flags about how difficult it will be to reverse this trend.

The authors take an in-depth look at the underlying causes of deaths of despair and why the impact among those without a bachelor’s degree is so pronounced. The impact of several forces in play within the U.S. over the past half-century that have brought about a decrease in life expectancy are explored in detail. Additionally, the authors provide their recommendations for easing this situation in the future.

The book begins by taking a look at life expectancy in the U.S. over the course of the 20th century. Historical perspective is provided on the substantial improvements in life expectancy based on the full experience of the 20th century and medical and lifestyle advances.

Then the deep dive begins into the flattening of or decline in life expectancy in the U.S. over the course of the past couple of decades. The book combines looking at societal issues, actuarial concepts, and economic theories to explain this trend in life expectancy in the U.S.

The focus is on the life expectancy and mortality of white non-Hispanics aged 45 to 54 over the course of the past 50 years. This includes both men and women. In particular, the experience in deaths of despair of those without a bachelor’s degree have sharply increased compared to those with a bachelor’s degree as highlighted by the authors over the past couple of decades. The overall decrease in life expectancy is thus stemming from this divide.

In one rather alarming bit of analysis, the authors find that the advances in mortality improvement due to heart disease have been completely wiped out by the increase in mortality due to deaths of despair over that past decade within the 45 to 54 age group for white non-Hispanics.

Comparisons are drawn throughout to “rich” countries primarily in Europe. Other rich countries have not seen a similar flattening or decline in life expectancy, so this raises troubling concerns for the U.S. Additionally, the experience of Black people is also analyzed and compared to the experience of white non-Hispanics. However, the experience of Black people related to deaths of despair has not seen the marked increase over the past decade.

Notably, the book was published in 2020. All the analysis was done prior to that calendar year. On this basis, it provides a good analysis of the increase in mortality without having to consider COVID-19. As has been seen with many of the recent improvement scales, the level of improvement within the U.S. has been declining even before COVID-19 at many ages.

The authors include many charts to illustrate their analysis and review. At a high level, these definitely depict the conclusions made. At a detailed level, I would encourage readers to reference an eBook version, rather than a hard-copy book. For example, several charts are of the continental U.S. divided into 1,000 subregions based on the authors’ analysis. In a hard-copy book, these charts (choropleth maps) are about four inches by two inches and include 10 subtle shades of black and grey to identify variations of experience in the 1,000 subregions. If you are interested in reviewing detail, it is hard to tell the gradients between charts, such as within a particular state, unless you have the capability to expand the view of the chart.

The authors identify several factors over the course of the past half century that have led to this current crisis. The key factors include issues with the U.S. health care system along with globalization, outsourcing, and automation. These factors also have many other intertwined subfactors that really make the causes of deaths of despair very difficult to unwind.

It is the authors’ firm belief that the U.S. health care structure is one of the critical reasons why there has been such an increase in deaths of despair. The cost of health care in the U.S. is rising at a rate that is much higher than those of other rich countries, but yet life expectancy in the U.S. is not increasing as being seen by the same rich countries. This raises a serious question as to what is the U.S. really getting with their health care dollars.

Pharmaceutical companies that develop and market opioids as well as other drugs relay the cost on to the consumer with little regulation of the cost in the U.S. The availability of opioids, potential overprescribing, and lack of treatment for those with dependencies are major factors to the overall opioid overdoses.

The increasing cost of health care has driven premiums on a constant upward climb. The impact on employee take-home pay is that the net amount is less as employees are forced to foot more of the bill or employers decide to hold down wages in order to pay for the increase in health care premiums. For employers paying health care premiums, this leads to a downward push or levelling off on the wages employees take home, so that employers can afford their portion of the premiums.

Globalization, outsourcing, and automation has led to job loss or job displacement in the U.S. for many workers without a bachelor’s degree. The authors contend that this has brought about despair in many communities because those who have lost jobs are not able to find employment at nearly the same pay level as they had in the past. One of the subfactors within this area is the decline of labor union presence that would help support higher wages. Additionally, in many of these communities, monopsony situations have arisen whereby there are few employers in a community and many workers, such that the available employers can hire the workers at lower wages than in a generally competitive market.

The authors provide a broad list of areas within the U.S. economy that could be reformed in order to address the issues raised in the book. Unfortunately, none of these are quick fixes and it would take several of them together to improve the situation.

From an actuarial perspective, one key takeaway from this publication is that the forces in play that have brought about increased mortality rates and decreased life expectancy in the U.S. prior to 2020 will not be easily overcome. Since there are a number of factors that have brought this about, the concern is that we will continue to see increased mortality rates and decreased life expectancies in the U.S. for years, even after COVID-19 has dissipated.

After we recover from the COVID-19 pandemic, the points made in this book should raise awareness that life expectancy in the U.S. may continue to flatten or only rise in smaller increments compared to other countries due to systemic issues within the U.S. society and economy.

Elizabeth M. Jabek, ASA, is an actuary at the U.S. Railroad Retirement Board. She can be reached at elizabeth.jabek@rrb.gov.