This thesis examines the impact of increased life expectancy on measured living standards. The focus is on welfare development in Finland as compared to the other Nordic and European countries during the period of 1950 to 2009.

This thesis primarily refers to the work done by Markus Haacker (2011a) but also relies on other relevant and key research done in health economics e.g. Gary S. Becker, Tomas J. Philipson and Rodrigo R. Soares (2005), Kevin M. Murphy and Robert H. Topel (2006) and Kip W. Viscusi (2005 and 2008).

The results show that increased life expectancy has had a significant impact on the increase in welfare, especially in Finland. When taking into account the growth in life expectancy in the measurement, Finland's welfare growth rate has been at times faster than its Nordic peers even though the GDP growth has been slower.

Findings of the thesis demonstrate that healthcare and related expenditure should not be viewed merely as a cost for the society but as an economic factor and an asset to invest in. This thesis hopes to bring additional points of views and considerations t the overall policy discussions in Finland regarding the aging of population.