Overview

Abstract

The extrapolated growth of the health care sector in both the United States and Japan is of concern to the specialist and laymen alike. Both economies have witnessed very rapid growth in health care services, with a greater share of labor and capital being absorbed by that sector in the two economies. The trade-off between investment in resources associated with life extension vs. that associated with the enhancement of the productivity of the workforce is of vital importance to both Japan and the United States as both countries have witnessed unprecedented growth in their respective aged populations. The trend of a rapidly expanding elderly class will continue well in the 21st century, as will rising medical expenditures that are required to care for this elderly class. Just how the two economies can sustain this growth in health care spending, as health care must be financed by resources from the more productive sectors, is the concern of this study.