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Adult Longevity and Growth Takeoff

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  • Daishin Yasui

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    (Graduate School of Economics, Kobe University)

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    Abstract

    This paper develops an overlapping generations model in which agents make educational and fertility decisions under life-cycle considerations, and retirement from work is distinguished from death. This model sheds light on a novel mechanism that links life expectancy, retirement, education, fertility, and growth. Gains in adult longevity induce agents to save more for retirement, reduce fertility, invest in education, and achieve sustained growth. Even if the length of working life is shortened by early retirement, this mechanism works as long as adult longevity increases sufficiently. Our model replicates the stylized facts of the transition from stagnation to growth in terms of longevity, time in retirement, fertility, education, and income, as well as reconciles the theory that gains in life expectancy trigger a growth takeoff by increasing education with the observation that the length of working life is not substantially prolonged because of retirement. This study provides a framework for considering the joint determination of education, fertility, and retirement.

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    File URL: http://www.econ.kobe-u.ac.jp/RePEc/koe/wpaper/2012/1218.pdf
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    Bibliographic Info

    Paper provided by Graduate School of Economics, Kobe University in its series Discussion Papers with number 1218.

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    Length: 36pages
    Date of creation: Aug 2012
    Date of revision:
    Handle: RePEc:koe:wpaper:1218

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    Web page: http://www.econ.kobe-u.ac.jp
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    Keywords: Fertility; Growth; Human capital; Life expectancy; Retirement;

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