A mixed blessing of lifespan heterogeneity
AbstractHuman mortality data reveal that life expectancy in industrialized countries has been converging to a common value. Yet, significant variations in the distributions of adult life-table ages at death among some developed countries have also been observed. This paper, largely motivated by Japan’s mortality data, presents a general equilibrium, overlapping-generations model that assesses the welfare effects of the mean-preserving declines in the variance of the distribution of adult ages at death. Our quantitative exercise reveals that for a given value of the economy-wide life expectancy, the individual welfare effects due to switching from high to low-variance steady states are length of life-dependent, quite sensitive to the average economy-wide retirement age, and strongly influenced by associated changes in the labor supply, factor prices, and lifetime earnings.
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Bibliographic InfoArticle provided by Elsevier in its journal Journal of the Japanese and International Economies.
Volume (Year): 29 (2013)
Issue (Month): C ()
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Web page: http://www.elsevier.com/locate/inca/622903
General equilibrium; Lifespan heterogeneity; Life expectancy; Variance in adult age at death; Compensating variation;
Find related papers by JEL classification:
- D91 - Microeconomics - - Intertemporal Choice - - - Intertemporal Household Choice; Life Cycle Models and Saving
- E20 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - General (includes Measurement and Data)
- J11 - Labor and Demographic Economics - - Demographic Economics - - - Demographic Trends, Macroeconomic Effects, and Forecasts
- J17 - Labor and Demographic Economics - - Demographic Economics - - - Value of Life; Foregone Income
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