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Education, Life Expectancy and Family Bargaining: The Ben-Porath Effect Revisited

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  • Laura Leker

    (PSE - Paris-Jourdan Sciences Economiques - CNRS : UMR8545 - École des Hautes Études en Sciences Sociales (EHESS) - École des Ponts ParisTech (ENPC) - École normale supérieure [ENS] - Paris - Institut national de la recherche agronomique (INRA), EEP-PSE - Ecole d'Économie de Paris - Paris School of Economics - Ecole d'Économie de Paris)

  • Grégory Ponthière

    (PSE - Paris-Jourdan Sciences Economiques - CNRS : UMR8545 - École des Hautes Études en Sciences Sociales (EHESS) - École des Ponts ParisTech (ENPC) - École normale supérieure [ENS] - Paris - Institut national de la recherche agronomique (INRA), EEP-PSE - Ecole d'Économie de Paris - Paris School of Economics - Ecole d'Économie de Paris)

Abstract

Following Ben-Porath (1967), the in‡fluence of life expectancy on education has attracted much attention. Whereas existing growth models rely on an education decision made either by the child or by his parent, we revisit the Ben-Porath effect when the education is the outcome of a bargaining between the parent and the child. We develop a three-period OLG model with human capital accumulation and endogenous life expectancy, and show that, as a result of the unequal life horizons faced by parents and children, the Ben-Porath effect depends on the distribution of bargaining power within the family, which in turn affects the long-run dynamics of the economy. Using data on 17 OECD countries (1940-1980), we show that the introduction of intergenerational bargaining on education helps to rationalize the observed education patterns across countries.

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Bibliographic Info

Paper provided by HAL in its series PSE Working Papers with number halshs-00715104.

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Date of creation: Jul 2012
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Handle: RePEc:hal:psewpa:halshs-00715104

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Keywords: Education ; Life Expectancy ; Family Bargaining ; OLG Model;

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References

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  18. Cervellati, Matteo & Sunde, Uwe, 2011. "Life expectancy and economic growth: The role of the demographic transition," Munich Reprints in Economics 20078, University of Munich, Department of Economics.
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