As populations age, noncommunicable diseases and mental health conditions are draining South American economies, reducing labour supply and diverting resources from investment. This column presents a macroeconomic model for ten South American countries to examine the effects of noncommunicable diseases and mental health conditions on healthcare costs and human capital. The findings suggest that from 2020 to 2050, health burdens will cost these countries 7ドル.3 trillion in lost GDP, equivalent to a 4% annual tax on GDP. Investing in prevention, healthcare reform, and age-friendly policies can turn this burden into a longevity dividend.
Population ageing has replaced population growth as the foremost demographic concern worldwide. Thanks to longevity increases, fertility declines, and the ageing of large birth cohorts, the global share of people aged 65 and older has grown in the last 25 years from 6.8% to 10.4% and is projected to reach 16.3% by 2050. By 2050, the number of people reaching 65 years of age (the ‘old’) is projected to increase from 421.8 million to 1.6 billion, and those reaching 85 (the ‘oldest old’) from 29.9 million to 215.6 million (United Nations 2022). In other words, the world is adding over one billion older adults in the next 30 years.
Ageing and the burden of noncommunicable diseases and mental health conditions
Ageing is the primary risk factor for noncommunicable diseases and mental health conditions, comprising noncommunicable diseases such as cardiovascular diseases, cancers, diabetes, and chronic respiratory diseases, and mental health conditions such as Alzheimer’s disease and related dementias, depression, anxiety, and autism spectrum disorders. The WHO attributes 74% of global annual deaths to noncommunicable diseases (WHO 2023). Globally, cardiovascular diseases and cancers alone account for 40% of disability-adjusted life years (DALYs) and 68% of deaths related to noncommunicable diseases and mental health conditions, while mental disorders add another 8% of global DALYs (Vos et al. 2020).
The drivers of noncommunicable diseases and mental health conditions extend well beyond population ageing. Behavioural risks (including tobacco and excessive alcohol use, physical inactivity, and an unhealthy diet) influence biological risk factors (obesity, elevated blood pressure, high glucose levels). Urbanisation, globalisation, and technological innovation shape such lifestyle perils and foster sedentary lifestyles and poor diets while deepening inequalities in education, living and working conditions, and access to quality healthcare. Besides contributing to the proliferation of respiratory diseases, pollution is also a risk factor for neurological decline, including Alzheimer’s disease and related dementias.
Economic burden of noncommunicable diseases and mental health conditions
Noncommunicable diseases and mental health conditions are more than a health crisis; they are a drain on the economy. Noncommunicable diseases and mental health conditions suppress a country’s economy through two channels. First, mortality and morbidity reduce labour supply via early retirement (French 2005), reduced working hours (Cai et al. 2014), and diminished productivity (Capatina 2015). Second, unhealthy populations are forced to spend more on healthcare, diverting money away from saving, investment, and physical capital accumulation (De Nardi et al. 2010). These mechanisms have compound effects, as reductions in aggregate income further reduce saving and investment, thereby slowing the pace of economic growth.
A closer look: South America
Reducing the burden of noncommunicable diseases and mental health conditions would liberate some of these resources. Our recent paper (Ferranna et al. 2023), which also informed the Pan American Health Organization’s 2025 report (PAHO 2025), sought to calculate just how much noncommunicable diseases and mental health conditions cost South American society. The region is ageing rapidly: the share of people aged 65 and older will more than double between 2020 and 2050, from 9% to 20%. Noncommunicable diseases and mental health conditions already cause 77% of all deaths and 72% of DALYs (Vos et al. 2020) in South America.
We modelled the macroeconomic effects of noncommunicable diseases and mental health conditions over 2020–2050 for Argentina, Bolivia, Brazil, Chile, Colombia, Ecuador, Paraguay, Peru, Uruguay, and Venezuela. The model (Figure 1) accounts for the mortality and morbidity effects of noncommunicable diseases and mental health conditions on labour supply, the impact of treatment costs on physical capital accumulation, and variations in human capital by age and gender.
Figure 1 Diagram of the macroeconomic model
Figure 1 Diagram of the macroeconomic model
We simulated two scenarios: a status quo scenario, wherein no health intervention is implemented and the prevalence of noncommunicable diseases and mental health conditions evolves as expected, and a counterfactual scenario, wherein the complete elimination of noncommunicable diseases and mental health conditions at zero cost is projected. The GDP difference between these scenarios defines the macroeconomic cost of noncommunicable diseases and mental health conditions.
The results are stark. Between 2020 and 2050, noncommunicable diseases and mental health conditions are projected to cost South American countries 7ドル.3 trillion in GDP losses (2022 international dollars), approximately 4% of the region’s total GDP. This number roughly corresponds to what countries are now spending annually on education. Country-level burdens range from 88ドル billion in Uruguay to 3ドル.7 trillion in Brazil (Table 1). In per capita terms, the heaviest costs are borne by Chile (27,300ドル), Uruguay (25,700ドル), and Argentina (23,900ドル). These nations have the largest GDP per capita and among the largest healthcare spending per capita and, therefore, stand to gain more from averting each death or case of illness.
Table 1 The macroeconomic burden of noncommunicable diseases and mental health conditions in South America
Table 1 The macroeconomic burden of noncommunicable diseases and mental health conditions in South America
Notes: i DALYs are disability-adjusted life years, a standard measure of the disease burden that captures years of life lost from premature death (mortality) and years of healthy life lost from disability (morbidity). Each DALY corresponds to a loss of one year of full, healthy life. The number of DALYs was estimated by assuming that the annual growth rate of DALYs equals the average growth rate observed in 2009–2019.
ii The number of DALYs per 1,000 people was estimated by dividing the projected total number of DALYs by the total population in 2020–2050.
iii The per capita GDP loss is relative to each country’s average population in 2020–2050. Values are approximated to the nearest hundred.
iv Loss as a percentage of total GDP during the period 2020–2050 was estimated by dividing the total GDP loss due to noncommunicable diseases and mental health conditions by the discounted sum of annual GDP in the status quo scenario over the period.
Seen another way, failing to intervene – allowing the status quo scenario to become reality – is akin to imposing a tax equivalent to 4% of GDP every year for the next 30 years. Population ageing is effectively penalising South American economies.
Options for action
However, this ‘tax’ is avoidable. Policies to reduce the prevalence and impact of noncommunicable diseases and mental health conditions can spur economic growth. Effective strategies include health promotion and prevention, such as initiatives to reduce harmful behaviours; strengthening of institutional capacities to enhance training and coordination among institutions and sectors; reform of long-term care systems that are unprepared for the cresting wave of population ageing (one estimate by Kotschy and Bloom 2022 projected a 47% increase in long-term care demands in 2020–2040); overhauling of healthcare systems towards universal access to quality care; responsive healthcare policy that incorporates feedback on the its users’ needs; and more rigorous health technology assessment and innovation that includes a full accounting of health’s value.
Because noncommunicable diseases and mental health conditions rise in prevalence as a population ages, policies designed to promote healthy ageing are sound fiscal policy. Pension reforms (Amuri et al. 2021), age-friendly jobs (Scott et al. 2022), and incentives for later retirement (Spinnewijn et al. 2022) can extend working lives. Infrastructure investments (public transportation, accessible public restrooms, driverless cars) could support older people’s independence and enable their continued active participation in society – not only in social activities, which are inherently valuable, but also in labour market and nonmarket productive endeavours like volunteering in the community and providing familial childcare services (Bloom 2022).
As the PAHO report notes: "The beneficial downstream effects of a lower NMH [noncommunicable diseases and mental health conditions] burden in the older population include greater financial autonomy, enhanced social connection, and better mental health, compounding into further NMH reductions" (PAHO 2025).
The inequality dimension
Not all ageing is equal. A recent Dutch study (Danesh et al. 2024) found that differential ageing (low-income individuals developing chronic illness at a faster rate than those with higher incomes) explains 40% more of the chronic disease gap at age 70 than health-based sorting (chronically ill individuals sorting into low-income groups). Strikingly, half of this health gap is visible by age 40, highlighting the need for early interventions to address the social determinants of health. Cardiovascular disease, diabetes, and respiratory illness were most responsible for these disparities – conditions that are highly responsive to prevention.
Without tackling inequality, population ageing will amplify existing divides. Preventive health policies targeting disadvantaged groups save lives and close economic and social gaps.
The reframing of ageing as longevity
Policies to combat noncommunicable diseases and mental health conditions ultimately converge on one idea: facilitating healthy ageing. Andrew Scott’s 2024 book The Longevity Imperative reframes the discussion about ageing to one about longevity, emphasising the positive economic potential of healthier, longer lives. This ‘longevity dividend’ includes reduced healthcare spending, longer time in the labour market, greater productivity, and alleviated pressure on pension systems. Healthier ageing also creates an extended timeline for returns to investments in human capital to accrue, incentivising education and boosting productivity and GDP growth.
Conclusion
Population ageing and noncommunicable diseases and mental health conditions threaten economic growth by shrinking labour supply, diminishing productivity, and diverting resources into healthcare. Increasing demands on social security systems and skyrocketing needs for long-term care are poised to further strain economies that will see fewer workers contributing to the tax base. In South America alone, noncommunicable diseases and mental health conditions are projected to reduce GDP by 7ドル.3 trillion between 2020 and 2050, equivalent to a 4% annual tax.
Yet, this tax is self-imposed and preventable. Health is not only an intrinsic good but also a driver of social and economic wellbeing. Policies that promote healthy ageing – prevention, healthcare reform, long-term care, support for active older adults – can transform the burden of ageing into a longevity dividend.
Demography is not destiny, as our policy choices can literally shape the future. Now is the time to enact salutary policies. The ever-increasing biological and behavioural risk factors for noncommunicable diseases and mental health conditions are on a dangerous collision course with explosive population ageing. If that course is not corrected, the result will be long-lasting health, social, and economic burdens, with aggravated inequalities in each of those domains. To invoke the famous quote from Benjamin Franklin, death may remain the ultimate certainty, but this is one tax we are not predestined to pay.
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Kotschy, R, and D E Bloom (2022), "A comparative perspective on long-term care systems", International Social Security Review 75: 3-4.
Pan American Health Organization (2025), Major storm on the horizon: Health and macroeconomic burdens of noncommunicable diseases and mental health conditions in South America, Washington, D.C.: Pan American Health Organization.
Scott, A J (2024), The longevity imperative: How to build a healthier and more productive society to support our longer lives, London: Basic Books.
United Nations (2022), World population prospects: Summary of results, New York: United Nations, Department of Economic and Social Affairs, Population Division.
Vos, T, S S Lim, C Abbafati, K M Abbas, M Abbasi, M Abbasifard, et al. (2020), "Global burden of 369 diseases and injuries in 204 countries and territories, 1990–2019: A systematic analysis for the Global Burden of Disease Study 2019", The Lancet 396: 1204–22.
World Health Organization (2023), "Noncommunicable diseases", WHO Fact Sheets.
