IDEAS home Printed from https://ideas.repec.org/p/mlb/wpaper/1002.html
   My bibliography  Save this paper

Choosing Longevity with Overlapping Generations

Author

Listed:
  • Weichun Chen
  • Merwan Engineer
  • Ian King

Abstract

We extend Diamond’s (1965) OLG model to allow agents to choose whether to participate in the second period of life. The valuation of early exit (x) is a key parameter. We characterize competitive equilibria, efficient allocations, and predictions for income and life expectancy over time. We find that, with logarithmic utility, for any value of x, there is a range of initial values of the capital stock for which some agents would prefer to exit in equilibrium. The shape of the transition function and the number of steady state equilibria depend crucially on the value of capital’s share of income.

Suggested Citation

  • Weichun Chen & Merwan Engineer & Ian King, 2007. "Choosing Longevity with Overlapping Generations," Department of Economics - Working Papers Series 1002, The University of Melbourne.
  • Handle: RePEc:mlb:wpaper:1002
    as

    Download full text from publisher

    File URL: http://fbe.unimelb.edu.au/__data/assets/pdf_file/0007/802825/1002.pdf
    Download Restriction: no

    References listed on IDEAS

    as
    1. Angus Deaton, 2003. "Health, Inequality, and Economic Development," Journal of Economic Literature, American Economic Association, vol. 41(1), pages 113-158, March.
    2. Grossman, Michael, 1972. "On the Concept of Health Capital and the Demand for Health," Journal of Political Economy, University of Chicago Press, vol. 80(2), pages 223-255, March-Apr.
    3. Gary S. Becker & Tomas J. Philipson & Rodrigo R. Soares, 2005. "The Quantity and Quality of Life and the Evolution of World Inequality," American Economic Review, American Economic Association, vol. 95(1), pages 277-291, March.
    4. Chakraborty, Shankha, 2004. "Endogenous lifetime and economic growth," Journal of Economic Theory, Elsevier, vol. 116(1), pages 119-137, May.
    5. repec:rus:hseeco:71105 is not listed on IDEAS
    6. K Blackburn & H Issa, 2002. "Endogenous Life Expectancy in a Simple Model of Growth," The School of Economics Discussion Paper Series 0217, Economics, The University of Manchester.
    7. 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.
    8. K Blackburn & H Issa, 2002. "Endogenous Life Expectancy in a Simple Model of Growth," Centre for Growth and Business Cycle Research Discussion Paper Series 13, Economics, The Univeristy of Manchester.
    9. Zsolt Becsi, 2001. "Longevity and the Life Cycle," Departmental Working Papers 2001-12, Department of Economics, Louisiana State University.
    10. Bhattacharya, Joydeep & Qiao, Xue, 2005. "Public and Private Expenditures on Health in a Growth Model," Staff General Research Papers Archive 12378, Iowa State University, Department of Economics.
    11. Ehrlich, Isaac & Chuma, Hiroyuki, 1990. "A Model of the Demand for Longevity and the Value of Life Extension," Journal of Political Economy, University of Chicago Press, vol. 98(4), pages 761-782, August.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Driouchi, Ahmed & Boboc, Cristina & Zouag, Nada, 2009. "Interdependencies of Health, Education and Poverty: The Case of South Mediterranean Economies/Interdependencias de salud, educación y pobreza: el caso de las Economías Sur-Mediterráneas," Estudios de Economía Aplicada, Estudios de Economía Aplicada, vol. 27, pages 523-544, Agosto.

    More about this item

    Keywords

    ndogenous longevity; overlapping generations; growth;

    JEL classification:

    • D91 - Microeconomics - - Micro-Based Behavioral Economics - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making
    • O1 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development

    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:mlb:wpaper:1002. 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: (Dandapani Lokanathan). General contact details of provider: http://edirc.repec.org/data/demelau.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.