IDEAS home Printed from https://ideas.repec.org/p/kud/kuiedp/1215.html
   My bibliography  Save this paper

Longevity and Schooling: The Case of Retirement

Author

Listed:
  • Nina Boberg-Fazlic

    (University of Copenhagen, Department of Economics)

Abstract

It is often conjectured that higher life expectancy leads to longer schooling. The reasoning behind this notion is that a longer lifespan increases the recovery period of human capital investment and thus, makes it more profitable to invest in education. This notion goes back to Ben-Porath (1967) and is therefore often termed the Ben-Porath mechanism. However, the original Ben-Porath mechanism concerns the length of economic life and not the length of life per se. This distinction is important in the presence of retirement and especially so as earlier retirement ages are observed in many western countries. This paper presents an overlapping generations model including both an educational and a retirement decision, thereby being able to test the Ben-Porath mechanism using the correct de nition of length of working life. It is found that an increase in life expectancy does not necessarily increase the expected length of economic life as also early retirement can occur. Schooling still increases, however not due to the increase in the recovery horizon but due to an increase in the probability of surviving the recovery period.

Suggested Citation

  • Nina Boberg-Fazlic, 2012. "Longevity and Schooling: The Case of Retirement," Discussion Papers 12-15, University of Copenhagen. Department of Economics.
  • Handle: RePEc:kud:kuiedp:1215
    as

    Download full text from publisher

    File URL: http://www.econ.ku.dk/english/research/publications/wp/dp_2012/1215.pdf
    Download Restriction: no

    References listed on IDEAS

    as
    1. Matteo Cervellati & Uwe Sunde, 2011. "Life expectancy and economic growth: the role of the demographic transition," Journal of Economic Growth, Springer, vol. 16(2), pages 99-133, June.
    2. Heijdra, Ben J. & Romp, Ward E., 2009. "Human capital formation and macroeconomic performance in an ageing small open economy," Journal of Economic Dynamics and Control, Elsevier, vol. 33(3), pages 725-744, March.
    3. Ciccone, Antonio & Hall, Robert E, 1996. "Productivity and the Density of Economic Activity," American Economic Review, American Economic Association, vol. 86(1), pages 54-70, March.
    4. Strulik, Holger & Werner, Katharina, 2012. "Life Expectancy, Labor Supply, and Long-Run Growth: Reconciling Theory and Evidence," Hannover Economic Papers (HEP) dp-497, Leibniz Universität Hannover, Wirtschaftswissenschaftliche Fakultät.
    5. Boucekkine, Raouf & de la Croix, David & Licandro, Omar, 2002. "Vintage Human Capital, Demographic Trends, and Endogenous Growth," Journal of Economic Theory, Elsevier, vol. 104(2), pages 340-375, June.
    6. Bloom, David E. & Canning, David & Mansfield, Richard K. & Moore, Michael, 2007. "Demographic change, social security systems, and savings," Journal of Monetary Economics, Elsevier, vol. 54(1), pages 92-114, January.
    7. Kalemli-Ozcan, Sebnem & Ryder, Harl E. & Weil, David N., 2000. "Mortality decline, human capital investment, and economic growth," Journal of Development Economics, Elsevier, vol. 62(1), pages 1-23, June.
    8. Heijdra, Ben J. & Romp, Ward E., 2009. "Retirement, pensions, and ageing," Journal of Public Economics, Elsevier, vol. 93(3-4), pages 586-604, April.
    9. Seema Jayachandran & Adriana Lleras-Muney, 2009. "Life Expectancy and Human Capital Investments: Evidence from Maternal Mortality Declines," The Quarterly Journal of Economics, Oxford University Press, vol. 124(1), pages 349-397.
    10. Yoram Ben-Porath, 1967. "The Production of Human Capital and the Life Cycle of Earnings," Journal of Political Economy, University of Chicago Press, vol. 75, pages 352-352.
    11. Moshe Hazan, 2009. "Longevity and Lifetime Labor Supply: Evidence and Implications," Econometrica, Econometric Society, vol. 77(6), pages 1829-1863, November.
    12. Casper Hansen & Lars Lønstrup, 2012. "Can higher life expectancy induce more schooling and earlier retirement?," Journal of Population Economics, Springer;European Society for Population Economics, vol. 25(4), pages 1249-1264, October.
    13. Cruz A. Echevarría, 2004. "Life Expectancy, Schooling Time, Retirement, and Growth," Economic Inquiry, Western Economic Association International, vol. 42(4), pages 602-617, October.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    longevity; human capital; retirement; overlapping generations;

    JEL classification:

    • D91 - Microeconomics - - Micro-Based Behavioral Economics - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making
    • I20 - Health, Education, and Welfare - - Education - - - General
    • J10 - Labor and Demographic Economics - - Demographic Economics - - - General
    • J26 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Retirement; Retirement Policies

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:kud:kuiedp:1215. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Thomas Hoffmann). General contact details of provider: http://edirc.repec.org/data/okokudk.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.