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Longevity and Lifetime Labour Input: Data and Implications

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  • Hazan, Moshe

Abstract

The Ben-Porath (1967) mechanism suggests that prolonging the period during which individuals may receive returns on their investment spurs investment in human capital and causes growth. An important, albeit implicit implication of this mechanism is that the total labour input over a lifetime must increase as longevity does. Otherwise, the incentive to invest in education would not increase. We propose an empirical evaluation of the relevance of this mechanism to the transition from 'stagnation' to 'growth' in today’s developed economies. Specifically, we estimate the expected total lifetime working hours of consecutive cohorts of American men born between 1840 and 1970. Our results show that despite a gain of more than 15 years in life expectancy at the age 5, the expected total lifetime working hours have declined by more than 20 percent between the oldest and youngest cohorts. Furthermore, the similarity in the trends and the magnitudes of the determinants of total lifetime labour input between the US and many European countries suggest that our result is not confined to the US experience; rather, it is a robust feature of the process of development. We conclude that the Ben-Porath mechanism has had no effect on the accumulation of human capital during the growth process of the nineteenth and twentieth centuries.

Suggested Citation

  • Hazan, Moshe, 2006. "Longevity and Lifetime Labour Input: Data and Implications," CEPR Discussion Papers 5963, C.E.P.R. Discussion Papers.
  • Handle: RePEc:cpr:ceprdp:5963
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    References listed on IDEAS

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    Cited by:

    1. Vandenbroucke, Guillaume, 2009. "Trends in hours: The U.S. from 1900 to 1950," Journal of Economic Dynamics and Control, Elsevier, vol. 33(1), pages 237-249, January.
    2. Matteo Cervellati & Uwe Sunde, 2015. "The Economic and Demographic Transition, Mortality, and Comparative Development," American Economic Journal: Macroeconomics, American Economic Association, vol. 7(3), pages 189-225, July.
    3. Moshe Hazan, 2009. "Longevity and Lifetime Labor Supply: Evidence and Implications," Econometrica, Econometric Society, vol. 77(6), pages 1829-1863, November.
    4. Michael Bar & Oksana Leukhina, 2010. "The role of mortality in the transmission of knowledge," Journal of Economic Growth, Springer, vol. 15(4), pages 291-321, December.
    5. Matteo Cervellati & Uwe Sunde, 2013. "Life Expectancy, Schooling, and Lifetime Labor Supply: Theory and Evidence Revisited," Econometrica, Econometric Society, vol. 81(5), pages 2055-2086, September.
    6. David de la Croix & Omar Licandro, 2013. "The Child is Father Of the Man: Implications for the Demographic Transition," Economic Journal, Royal Economic Society, vol. 123(567), pages 236-261, March.

    More about this item

    Keywords

    hours worked; human capital; longevity;

    JEL classification:

    • E20 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - General (includes Measurement and Data)
    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • J26 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Retirement; Retirement Policies
    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development

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