Uncertain Longevity and Investment in Education
AbstractIt has been argued that increased life expectancy raises the rate of return on education, causing a rise in the investment in education followed by an increase in lifetime labor supply. Empirical evidence of these relations is rather weak. Building on a lifecycle model with uncertain longevity, this paper shows that increased life expectancy does not suffice to warrant the above hypotheses. We provide assumptions about the change in survival probabilities, specifically about the age dependence of hazard rates, which determine individuals’ behavioral response w.r.t. education, work and age of retirement. Comparison is made between the case when individuals have access to a competitive annuity market and the case of no insurance.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by CESifo Group Munich in its series CESifo Working Paper Series with number 2784.
Date of creation: 2009
Date of revision:
longevity; survival functions; education; work; age of retirement; annuities;
Other versions of this item:
- D11 - Microeconomics - - Household Behavior - - - Consumer Economics: Theory
- D91 - Microeconomics - - Intertemporal Choice and Growth - - - Intertemporal Consumer Choice; Life Cycle Models and Saving
- E21 - Macroeconomics and Monetary Economics - - Macroeconomics: Consumption, Saving, Production, Employment, and Investment - - - Consumption; Saving; Wealth
- G23 - Financial Economics - - Financial Institutions and Services - - - Non-bank Financial Institutions; Financial Instruments; Institutional Investors
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Peter Lorentzen & John McMillan & Romain Wacziarg, 2005.
"Death and Development,"
NBER Working Papers
11620, National Bureau of Economic Research, Inc.
- Robert E. Hall & Charles I. Jones, 1999.
"Why Do Some Countries Produce So Much More Output per Worker than Others?,"
NBER Working Papers
6564, National Bureau of Economic Research, Inc.
- Robert E. Hall & Charles I. Jones, 1999. "Why Do Some Countries Produce So Much More Output Per Worker Than Others?," The Quarterly Journal of Economics, MIT Press, vol. 114(1), pages 83-116, February.
- Galor, Oded & Weil, David, 1999.
"From Malthusian Stagnation to Modern Growth,"
CEPR Discussion Papers
2082, C.E.P.R. Discussion Papers.
- Cervellati, Matteo & Sunde, Uwe, 2002. "Human Capital Formation, Life Expectancy and the Process of Economic Development," IZA Discussion Papers 585, Institute for the Study of Labor (IZA).
- Peter J. Klenow & Mark Bils, 2000. "Does Schooling Cause Growth?," American Economic Review, American Economic Association, vol. 90(5), pages 1160-1183, December.
- Yoram Ben-Porath, 1967. "The Production of Human Capital and the Life Cycle of Earnings," Journal of Political Economy, University of Chicago Press, vol. 75, pages 352.
- Moshe Hazan, 2009. "Longevity and Lifetime Labor Supply: Evidence and Implications," Econometrica, Econometric Society, vol. 77(6), pages 1829-1863, November.
- Ananth Seshadri & Rodolfo Manuelli, 2005. "Human Capital and the Wealth of Nations," 2005 Meeting Papers 56, Society for Economic Dynamics.
- Oded Galor, 2012.
"The demographic transition: causes and consequences,"
Cliometrica, Journal of Historical Economics and Econometric History,
Association Française de Cliométrie (AFC), vol. 6(1), pages 1-28, January.
- Galor, Oded, 2012. "The Demographic Transition: Causes and Consequences," IZA Discussion Papers 6334, Institute for the Study of Labor (IZA).
- Oded Galor, 2011. "The Demographic Transition: Causes and Consequences," NBER Working Papers 17057, National Bureau of Economic Research, Inc.
- Oded Galor, 2010. "The Demographic Transition: Causes and Consequences," Working Papers 2010-12, Brown University, Department of Economics.
- Galor, Oded, 2011. "The Demographic Transition: Causes and Consequences," CEPR Discussion Papers 8249, C.E.P.R. Discussion Papers.
- Strulik, Holger & Werner, Katharina, 2012.
"Life Expectancy, Labor Supply, and Long-Run Growth: Reconciling Theory and Evidence,"
Diskussionspapiere der Wirtschaftswissenschaftlichen FakultÃ¤t der Leibniz UniversitÃ¤t Hannover
dp-497, Leibniz Universität Hannover, Wirtschaftswissenschaftliche Fakultät.
- Strulik, Holger & Werner, Katharina, 2012. "Life expectancy, labor supply, and long-run growth: Reconciling theory and evidence," Center for European, Governance and Economic Development Research Discussion Papers 141, University of Goettingen, Department of Economics.
- Hansen, Casper Worm & Lønstrup, Lars, 2011. "Life expectancy and income: The Ben-Porath mechanism revisited," Discussion Papers of Business and Economics 3/2011, Department of Business and Economics, University of Southern Denmark.
- Daishin Yasui, 2012. "Adult Longevity and Growth Takeoff," Discussion Papers 1218, Graduate School of Economics, Kobe University.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Julio Saavedra).
If references are entirely missing, you can add them using this form.