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The Cost of Uncertain Life Span

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Author Info
Ryan D. Edwards

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Abstract

A considerable amount of uncertainty surrounds life expectancy at birth, the average length of life. The standard deviation in adult life spans is about 15 years in the U.S., and theory and evidence suggest it is costly. In this paper, I calibrate a standard intertemporal model to show that one less year in standard deviation is worth about half a mean life year. Differences in the standard deviation amplify measured differences in life expectancy between the U.S. and other industrialized countries, and accounting for historical gains against the standard deviation raises the total value of mortality declines during the last century by about 25 percent.

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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 14093.

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Date of creation: Jun 2008
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Handle: RePEc:nbr:nberwo:14093

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Find related papers by JEL classification:
I10 - Health, Education, and Welfare - - Health - - - General
J11 - Labor and Demographic Economics - - Demographic Economics - - - Demographic Trends and Forecasts
J17 - Labor and Demographic Economics - - Demographic Economics - - - Value of Life; Foregone Income
O11 - Economic Development, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development

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