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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] - Ecole des Ponts ParisTech - Ecole normale supérieure de Paris - 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] - Ecole des Ponts ParisTech - Ecole normale supérieure de Paris - 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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Related research

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

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  1. Cervellati, Matteo & Sunde, Uwe, 2009. "Life Expectancy and Economic Growth: The Role of the Demographic Transition," CEPR Discussion Papers 7361, C.E.P.R. Discussion Papers.
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  14. Ehrlich, Isaac & Lui, Francis T, 1991. "Intergenerational Trade, Longevity, and Economic Growth," Journal of Political Economy, University of Chicago Press, vol. 99(5), pages 1029-59, October.
  15. de la CROIX, David, 2008. "Adult longevity and economic take-off: from Malthus to Ben-Porath," CORE Discussion Papers 2008048, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
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