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Life expectancy and income: The Ben-Porath mechanism revisited

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  • Hansen, Casper Worm

    ()
    (Department of Business and Economics)

  • Lønstrup, Lars

    ()
    (Department of Business and Economics)

Abstract

In this paper we show that it may be optimal for individuals to educate themselves more and decrease future labor supply (choose earlier retirement) when life expectancy increases. This result reconciles the findings of Hazan [Hazan, M., 2009. Longevity and Lifetime Labor Supply: Evidence and Implications. Econometrica 77, 1829.1863] with theory. Further, the paper contributes to a better understanding of the conflicting empirical findings on the causal effect on income per capita from increased life expectancy.

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File URL: http://static.sdu.dk/mediafiles//8/1/0/%7B810F9BC8-342F-4A34-84E2-A9CF4054163D%7Ddpbe3_2011.pdf
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Bibliographic Info

Paper provided by Department of Business and Economics, University of Southern Denmark in its series Discussion Papers of Business and Economics with number 3/2011.

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Length: 14 pages
Date of creation: 16 Feb 2011
Date of revision:
Handle: RePEc:hhs:sdueko:2011_003

Note: Link: http://static.sdu.dk/mediafiles//8/1/0/%7B810F9BC8-342F-4A34-84E2-A9CF4054163D%7Ddpbe3_2011.pdf
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Postal: Department of Business and Economics, University of Southern Denmark, Campusvej 55, DK-5230 Odense M, Denmark
Phone: 65 50 32 33
Fax: 65 50 32 37
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Web page: http://www.sdu.dk/ivoe
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Keywords: Life-cycle model; life expectancy; schooling; retirement;

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  12. Alexander Ludwig & Edgar Vogel, 2010. "Mortality, fertility, education and capital accumulation in a simple OLG economy," Journal of Population Economics, Springer, vol. 23(2), pages 703-735, March.
  13. Jie Zhang & Junsen Zhang, 2005. "The Effect of Life Expectancy on Fertility, Saving, Schooling and Economic Growth: Theory and Evidence," Scandinavian Journal of Economics, Wiley Blackwell, vol. 107(1), pages 45-66, 03.
  14. Seema Jayachandran & Adriana Lleras-Muney, 2009. "Life Expectancy and Human Capital Investments: Evidence from Maternal Mortality Declines-super-," The Quarterly Journal of Economics, MIT Press, vol. 124(1), pages 349-397, February.
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