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Life Expectancy and the Environment

  • Mariani, Fabio

    ()

    (Université catholique de Louvain)

  • Pérez-Barahona, Agustín

    ()

    (Ecole Polytechnique, Paris)

  • Raffin, Natacha

    ()

    (University of Paris 1 Panthéon-Sorbonne)

We present an OLG model in which life expectancy and environmental quality dynamics are jointly determined. Agents may invest in environmental care, depending on how much they expect to live. In turn, environmental conditions affect life expectancy. As a result, our model produces a positive correlation between longevity and environmental quality, both in the long-run and along the transition path. Eventually, multiple equilibria may also arise: some countries might be caught in a low-life-expectancy / low-environmental-quality trap. This outcome is consistent with stylized facts relating life expectancy and environmental performance measures. We also discuss the welfare and policy implications of the intergenerational externalities generated by individual choices. Finally, we show that our results are robust to the introduction of growth dynamics based on physical or human capital accumulation.

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Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 4564.

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Length: 35 pages
Date of creation: Nov 2009
Date of revision:
Publication status: published in: Journal of Economic Dynamics and Control, 2010, 34 (4), 798-815
Handle: RePEc:iza:izadps:dp4564
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