IDEAS home Printed from https://ideas.repec.org/p/lmu/muenar/20077.html
   My bibliography  Save this paper

Life Expectancy, Schooling, and Lifetime Labor Supply: Theory and Evidence Revisited

Author

Listed:
  • Cervellati, Matteo
  • Sunde, Uwe

Abstract

This paper presents a theoretical and empirical analysis of the role oflife expectancy for optimal schooling and lifetime labor supply. Theresults of a simple prototype Ben-Porath model with age-specificsurvival rates show that an increase in lifetime labor supply is not anecessary, or a sufficient, condition for greater life expectancy toincrease optimal schooling. The observed increase in survival ratesduring working ages that follows from the rectangularization of thesurvival function is crucial for schooling and labor supply. Theempirical results suggest that the relative benefits of schooling havebeen increasing across cohorts of U.S. men born between 1840 and 1930. Asimple quantitative analysis shows that a realistic shift in thesurvival function can lead to an increase in schooling and a reductionin lifetime labor hours.

Suggested Citation

  • Cervellati, Matteo & Sunde, Uwe, 2013. "Life Expectancy, Schooling, and Lifetime Labor Supply: Theory and Evidence Revisited," Munich Reprints in Economics 20077, University of Munich, Department of Economics.
  • Handle: RePEc:lmu:muenar:20077
    as

    Download full text from publisher

    To our knowledge, this item is not available for download. To find whether it is available, there are three options:
    1. Check below whether another version of this item is available online.
    2. Check on the provider's web page whether it is in fact available.
    3. Perform a search for a similarly titled item that would be available.

    Other versions of this item:

    References listed on IDEAS

    as
    1. de la Croix, David & Licandro, Omar, 1999. "Life expectancy and endogenous growth," Economics Letters, Elsevier, vol. 65(2), pages 255-263, November.
    2. Sheshinski, Eytan, 2009. "Uncertain Longevity and Investment in Education," MPRA Paper 53144, University Library of Munich, Germany.
    3. Matteo Cervellati & Uwe Sunde, 2005. "Human Capital Formation, Life Expectancy, and the Process of Development," American Economic Review, American Economic Association, vol. 95(5), pages 1653-1672, December.
    4. Holger Strulik & Sebastian Vollmer, 2013. "Long-run trends of human aging and longevity," Journal of Population Economics, Springer;European Society for Population Economics, vol. 26(4), pages 1303-1323, October.
    5. dʼAlbis, Hippolyte & Lau, Sau-Him Paul & Sánchez-Romero, Miguel, 2012. "Mortality transition and differential incentives for early retirement," Journal of Economic Theory, Elsevier, vol. 147(1), pages 261-283.
    6. Rogerson, Richard & Wallenius, Johanna, 2009. "Micro and macro elasticities in a life cycle model with taxes," Journal of Economic Theory, Elsevier, vol. 144(6), pages 2277-2292, November.
    7. Blinder, Alan S & Weiss, Yoram, 1976. "Human Capital and Labor Supply: A Synthesis," Journal of Political Economy, University of Chicago Press, vol. 84(3), pages 449-472, June.
    8. Alexander Ludwig & Thomas Schelkle & Edgar Vogel, 2012. "Demographic Change, Human Capital and Welfare," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 15(1), pages 94-107, January.
    9. Hazan, Moshe, 2006. "Longevity and Lifetime Labour Input: Data and Implications," CEPR Discussion Papers 5963, C.E.P.R. Discussion Papers.
    10. 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.
    11. 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.
    12. repec:dau:papers:123456789/6825 is not listed on IDEAS
    13. Peter Rangazas, 2002. "The Quantity and Quality of Schooling and U.S. Labor Productivity Growth (1870-2000)," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 5(4), pages 932-964, October.
    14. 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.
    15. Alexander Ludwig & Thomas Schelkle & Edgar Vogel, 2012. "Demographic Change, Human Capital and Welfare," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 15(1), pages 94-107, January.
    16. John Wilmoth & Shiro Horiuchi, 1999. "Rectangularization revisited: Variability of age at death within human populations," Demography, Springer;Population Association of America (PAA), vol. 36(4), pages 475-495, November.
    17. Rosenbloom, Joshua L., 1996. "Was There a National Labor Market at the End of the Nineteenth Century? New Evidence on Earnings in Manufacturing," The Journal of Economic History, Cambridge University Press, vol. 56(3), pages 626-656, September.
    18. 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.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Sánchez-Romero, Miguel & d׳Albis, Hippolyte & Prskawetz, Alexia, 2016. "Education, lifetime labor supply, and longevity improvements," Journal of Economic Dynamics and Control, Elsevier, vol. 73(C), pages 118-141.
    2. 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.
    3. Holger Strulik & Katharina Werner, 2016. "50 is the new 30—long-run trends of schooling and retirement explained by human aging," Journal of Economic Growth, Springer, vol. 21(2), pages 165-187, June.
    4. Geppert, Christian, 2015. "On the Distributional Implications of Demographic Change," VfS Annual Conference 2015 (Muenster): Economic Development - Theory and Policy 113070, Verein für Socialpolitik / German Economic Association.
    5. Akira Momota, 2020. "Long Life-span and Optimal Recurrent Education," KIER Working Papers 1042, Kyoto University, Institute of Economic Research.
    6. repec:got:cegedp:141 is not listed on IDEAS
    7. Ben J. Heijdra & Laurie S. M. Reijnders, 2016. "Human Capital Accumulation and the Macroeconomy in an Ageing Society," De Economist, Springer, vol. 164(3), pages 297-334, September.
    8. Ken-ichi Hashimoto & Ken Tabata, 2016. "Demographic change, human capital accumulation and R&D-based growth," Canadian Journal of Economics, Canadian Economics Association, vol. 49(2), pages 707-737, May.
    9. Sánchez-Romero, Miguel & Prskawetz, Alexia, 2017. "Redistributive effects of the US pension system among individuals with different life expectancy," The Journal of the Economics of Ageing, Elsevier, vol. 10(C), pages 51-74.
    10. Thomas Ziesemer & Anne von Gässler, 2021. "Ageing, human capital and demographic dividends with endogenous growth, labour supply and foreign capital," Portuguese Economic Journal, Springer;Instituto Superior de Economia e Gestao, vol. 20(2), pages 129-160, May.
    11. Bloom, David E. & Kuhn, Michael & Prettner, Klaus, 2018. "Health and Economic Growth," IZA Discussion Papers 11939, Institute of Labor Economics (IZA).
    12. Daishin Yasui, 2012. "Adult Longevity and Growth Takeoff," Discussion Papers 1218, Graduate School of Economics, Kobe University.
    13. Sau-Him Lau, 2013. "Does longevity improvement always raise the length of schooling through the longer-horizon mechanism?," 2013 Meeting Papers 292, Society for Economic Dynamics.
    14. Wei-Bin Zhang, 2014. "Endogenous population with human and physical capital accumulation," International Review of Economics, Springer;Happiness Economics and Interpersonal Relations (HEIRS), vol. 61(3), pages 231-252, September.
    15. Michael Kuhn & Alexia Prskawetz & Uwe Sunde, 2014. "Health, education, and retirement over the prolonged life cycle: a selective survey of recent research," Vienna Yearbook of Population Research, Vienna Institute of Demography (VID) of the Austrian Academy of Sciences in Vienna, vol. 12(1), pages 1-22.
    16. Thomas Ziesemer & Anne von Gässler, 0. "Ageing, human capital and demographic dividends with endogenous growth, labour supply and foreign capital," Portuguese Economic Journal, Springer;Instituto Superior de Economia e Gestao, vol. 0, pages 1-32.
    17. Pierre Pestieau & Gregory Ponthiere, 2012. "The Public Economics of Increasing Longevity," Hacienda Pública Española / Review of Public Economics, IEF, vol. 200(1), pages 41-74, March.
    18. Gilles Le Garrec & Stéphane Lhuissier, 2011. "Life expectancy, heavy work and the return to education: lessons for the social security reform," Sciences Po publications 2011-18, Sciences Po.
    19. Strulik, Holger & Werner, Katharina, 2014. "Elite education, mass education, and the transition to modern growth," Center for European, Governance and Economic Development Research Discussion Papers 205, University of Goettingen, Department of Economics.
    20. 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.
    21. Casper Worm Hansen & Holger Strulik, 2017. "Life expectancy and education: evidence from the cardiovascular revolution," Journal of Economic Growth, Springer, vol. 22(4), pages 421-450, December.

    More about this item

    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

    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:lmu:muenar:20077. 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: . General contact details of provider: https://edirc.repec.org/data/vfmunde.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 bibliographic 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.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Tamilla Benkelberg (email available below). General contact details of provider: https://edirc.repec.org/data/vfmunde.html .

    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.