This paper analyzes how markets for old-age care respond to the aging of populations. We consider how the biological forces which govern the stocks of frail and healthy persons in a population interact with economic forces which govern the demand and supply for labor-intensive care.... We test our predictions empirically using state- and county-level evidence on the U.S. market for long-term care in nursing homes over the last three decades. (EXCERPT)

Welfare-Enhancing Technological Change and the Growth of Obesity by Darius Lakdawalla, Tomas Philipson and Jay Bhattacharya. Published in volume 95, issue 2, pages 253-257 of American Economic Review, May 2005