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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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  13. David Croix & Alessandro Sommacal, 2009. "A Theory of Medical Effectiveness, Differential Mortality, Income Inequality and Growth for Pre-Industrial England," Mathematical Population Studies, Taylor & Francis Journals, vol. 16(1), pages 2-35.
  14. Chakraborty, Shankha, 2004. "Endogenous lifetime and economic growth," Journal of Economic Theory, Elsevier, vol. 116(1), pages 119-137, May.
  15. Pierre-André Jouvet & Philippe Michel & Gilles Rotillon, 2004. "Optimal growth with pollution : how to use pollution permits ?," Cahiers de la Maison des Sciences Economiques v04012, Université Panthéon-Sorbonne (Paris 1).
  16. Gene M. Grossman & Alan B. Krueger, 1994. "Economic Growth and the Environment," NBER Working Papers 4634, National Bureau of Economic Research, Inc.
  17. Blackburn, Keith & Cipriani, Giam Pietro, 2002. "A model of longevity, fertility and growth," Journal of Economic Dynamics and Control, Elsevier, vol. 26(2), pages 187-204, February.
  18. John, A & Pecchenino, R, 1994. "An Overlapping Generations Model of Growth and the Environment," Economic Journal, Royal Economic Society, vol. 104(427), pages 1393-1410, November.
  19. Tetsuo Ono & Yasuo Maeda, 2001. "Is Aging Harmful to the Environment?," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 20(2), pages 113-127, October.
  20. Evans, Mary F. & Smith, V. Kerry, 2005. "Do new health conditions support mortality-air pollution effects?," Journal of Environmental Economics and Management, Elsevier, vol. 50(3), pages 496-518, November.
  21. Chichilnisky, Graciela & Heal, Geoffrey & Beltratti, Andrea, 1995. "The Green Golden Rule," Economics Letters, Elsevier, vol. 49(2), pages 175-179, August.
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