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A mixed blessing of lifespan heterogeneity

  • Gahramanov, Emin
  • Tang, Xueli

Human mortality data reveal that life expectancy in industrialized countries has been converging to a common value. Yet, significant variations in the distributions of adult life-table ages at death among some developed countries have also been observed. This paper, largely motivated by Japan’s mortality data, presents a general equilibrium, overlapping-generations model that assesses the welfare effects of the mean-preserving declines in the variance of the distribution of adult ages at death. Our quantitative exercise reveals that for a given value of the economy-wide life expectancy, the individual welfare effects due to switching from high to low-variance steady states are length of life-dependent, quite sensitive to the average economy-wide retirement age, and strongly influenced by associated changes in the labor supply, factor prices, and lifetime earnings.

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Article provided by Elsevier in its journal Journal of the Japanese and International Economies.

Volume (Year): 29 (2013)
Issue (Month): C ()
Pages: 142-153

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Handle: RePEc:eee:jjieco:v:29:y:2013:i:c:p:142-153
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