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Negligible senescence: An economic life cycle model for the future

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  • Dragone, Davide
  • Strulik, Holger

Abstract

We propose a model of aging and health deficit accumulation model with an infinite time horizon and a steady state of constant health. The time of death is uncertain and endogenous to lifestyle and health behavior. This setup can be conceptualized as a strive for immortality that is never reached. We discuss adjustment dynamics and show that the new setup is particularly useful to understand aging of the oldest old, i.e. of individuals for which morbidity and mortality have reached a plateau. We then show how the existence of a steady state can be used to perform comparative dynamics exercises analytically. As an illustration we investigate the effects of more expensive health investment and of advances in medical technology on optimal short run and long run health behavior.

Suggested Citation

  • Dragone, Davide & Strulik, Holger, 2020. "Negligible senescence: An economic life cycle model for the future," Journal of Economic Behavior & Organization, Elsevier, vol. 171(C), pages 264-285.
  • Handle: RePEc:eee:jeborg:v:171:y:2020:i:c:p:264-285
    DOI: 10.1016/j.jebo.2019.12.024
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    More about this item

    Keywords

    Comparative dynamics; Endogenous mortality; Life-expectancy; Medical progress;
    All these keywords.

    JEL classification:

    • D91 - Microeconomics - - Micro-Based Behavioral Economics - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making
    • I12 - Health, Education, and Welfare - - Health - - - Health Behavior
    • J17 - Labor and Demographic Economics - - Demographic Economics - - - Value of Life; Foregone Income

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