186
T H E C H A N G I N G W E A LTH O F N ATIO N S 2018
Working life expectancy, T, is calculated by weighting life expectancy to maximum working age by the probability that an individual will survive and be active in the labor force. It is expressed as
T j = ∑ t79= j s j,t × lt (9A.3)
where sj,t is the probability that a person of age j will survive to the end of age t, and l is the labor force participation rate. This assumes that life expectancy increases monotonically with age, which is not the case for countries with high rates of infant mortality and where life expectancy at birth is lower than it is for children who survive to age 1. Data used are from the International Labour Organization by five-year age group for ages 15–64 and for the open-ended 65-and-up age group.8 It is assumed that no person older than age 79 works. Valuing forgone labor output for children 14 and younger is a special case. Working life expectancy is estimated by accounting for survival probabilities up to age 15, and then is adjusted for labor force participation rates thereafter, as for adults in equation (9A.2). In equation (9A.1), the present value of labor income is discounted further into the future, assuming working age begins at 15.
Notes 1. See Wang and Mauzerall (2004); Avnery et al. (2011); and Zheng et al. (2014) for evidence from China. 2. All dollar figures reported in this chapter are 2014 US dollars at market exchange rates. 3. Here, total losses are for the 157 countries for which data are available for all years from 1995 to 2015. Estimates of forgone labor output in 2015 exist for another eight countries that are missing data for some earlier years. Including these countries, labor income losses in 2015 were US$179.8 billion. 4. Forgone labor income does not represent a deduction from GDP because GDP produced in a given year reflects the lower labor inputs resulting from air pollution. Losses are compared with GDP merely to provide a sense of relative magnitude. 5. The current position of the U.S. Environmental Protection Agency, the World Health Organization, and the International Agency for Research on Cancer is that there is still insufficient evidence to differentiate the health impacts from exposure to specific sources or components of PM2.5. With the GBD data that underlie the cost estimates, it is not possible to “net out” the effects of dust exposure. 6. Equatorial Guinea, for which losses due to household air pollution increased by 17.6 percent annually even though deaths declined, is excluded as an outlier. The apparent increase in losses for Equatorial Guinea is due entirely to income growth. 7. As in the case for household air pollution, Equatorial Guinea is excluded from this list of countries with the highest rates of growth in ambient PM2.5 losses as an outlier. 8. The International Labour Organization’s definition of the labor force encompasses anyone who is actively working or seeking work. This includes the