IDEAS home Printed from https://ideas.repec.org/
MyIDEAS: Login to save this paper or follow this series

Life expectancy, labor supply, and long-run growth: Reconciling theory and evidence

  • Strulik, Holger
  • Werner, Katharina

We set up a simple overlapping generation model that allows us to distinguish between life expectancy and active life expectancy. We show that individuals optimally adjust to a longer active life by educating more and, if the labor supply elasticity is high enough, by supplying less labor. When calibrated to US data the model explains the historical evolution of increasing education and declining labor supply (of cohorts born 1850-1950) as an optimal response to increasing active life expectancy. We integrate the theory into a unified growth model and reestablish increasing life expectancy as an engine of long-run economic development.

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

File URL: http://econstor.eu/bitstream/10419/70224/1/726201103.pdf
Download Restriction: no

Paper provided by University of Goettingen, Department of Economics in its series Center for European, Governance and Economic Development Research Discussion Papers with number 141.

as
in new window

Length:
Date of creation: 2012
Date of revision:
Handle: RePEc:zbw:cegedp:141
Contact details of provider: Postal: Platz der Göttinger Sieben 3, 37073 Göttingen
Web page: http://www.cege.wiso.uni-goettingen.de/

More information through EDIRC

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

as in new window
  1. Cervellati, Matteo & Sunde, Uwe, 2009. "Life Expectancy and Economic Growth: The Role of the Demographic Transition," IZA Discussion Papers 4160, Institute for the Study of Labor (IZA).
  2. Philippe Aghion & Peter Howitt & Fabrice Murtin, 2009. "The relationship between health and growth:when Lucas meets Nelson-Phelps," Documents de Travail de l'OFCE 2009-28, Observatoire Francais des Conjonctures Economiques (OFCE).
  3. Mikael Lindahl & Alan B. Krueger, 2001. "Education for Growth: Why and for Whom?," Journal of Economic Literature, American Economic Association, vol. 39(4), pages 1101-1136, December.
  4. 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.
  5. Oded Galor, 2005. "Unified Growth Theory," Development and Comp Systems 0504001, EconWPA.
  6. Sebnem Kalemli-Ozcan & David Weil, 2006. "Mortality Change, the Uncertainty Effect, and Retirement," 2006 Meeting Papers 28, Society for Economic Dynamics.
  7. George Psacharopoulos & Harry Anthony Patrinos, 2004. "Returns to investment in education: a further update," Education Economics, Taylor & Francis Journals, vol. 12(2), pages 111-134.
  8. Cervellati, Matteo & Sunde, Uwe, 2007. "Human Capital, Mortality and Fertility: A Unified Theory of the Economic and Demographic Transition," IZA Discussion Papers 2905, Institute for the Study of Labor (IZA).
  9. Hippolyte D'Albis & Paul Lau Sau-Him & Miguel Sanchez-Romero, 2012. "Mortality transition and differential incentives for early retirement," PSE - Labex "OSE-Ouvrir la Science Economique" hal-00659868, HAL.
  10. Maddison, A., 1991. "A Long Run Perspective on Saving," Papers 443, Groningen State, Institute of Economic Research-.
  11. David N. Weil & Oded Galor, 2000. "Population, Technology, and Growth: From Malthusian Stagnation to the Demographic Transition and Beyond," American Economic Review, American Economic Association, vol. 90(4), pages 806-828, September.
  12. Chakraborty, Shankha, 2004. "Endogenous lifetime and economic growth," Journal of Economic Theory, Elsevier, vol. 116(1), pages 119-137, May.
  13. repec:fda:fdaddt:2000-02 is not listed on IDEAS
  14. Jacob A. Mincer, 1974. "Introduction to "Schooling, Experience, and Earnings"," NBER Chapters, in: Schooling, Experience, and Earnings, pages 1-4 National Bureau of Economic Research, Inc.
  15. Zhang, Jie & Zhang, Junsen & Lee, Ronald, 2003. "Rising longevity, education, savings, and growth," Journal of Development Economics, Elsevier, vol. 70(1), pages 83-101, February.
  16. Moshe Hazan & Hosny Zoabi, 2005. "Does Longevity Cause Growth," GE, Growth, Math methods 0507001, EconWPA.
  17. Eytan Sheshinski, 2009. "Uncertain Longevity and Investment in Education," Discussion Paper Series dp520, The Federmann Center for the Study of Rationality, the Hebrew University, Jerusalem.
  18. Raouf BOUCEKKINE & David DE LA CROIX & Omar LICANDRO, 2002. "Early Mortality Declines at the Dawn of Modern Growth," Economics Working Papers ECO2002/11, European University Institute.
  19. Gary S. Becker, 1962. "Investment in Human Capital: A Theoretical Analysis," Journal of Political Economy, University of Chicago Press, vol. 70, pages 9.
  20. Seema Jayachandran & Adriana Lleras-Muney, 2009. "Life Expectancy and Human Capital Investments: Evidence from Maternal Mortality Declines-super-," The Quarterly Journal of Economics, MIT Press, vol. 124(1), pages 349-397, February.
  21. Chad Turner & Robert Tamura & Sean Mulholland & Scott Baier, 2007. "Education and income of the states of the United States: 1840–2000," Journal of Economic Growth, Springer, vol. 12(2), pages 101-158, June.
  22. Jacob A. Mincer, 1974. "Schooling, Experience, and Earnings," NBER Books, National Bureau of Economic Research, Inc, number minc74-1, 07.
  23. Robert Tamura, 2004. "Human capital and economic development," Working Paper 2004-34, Federal Reserve Bank of Atlanta.
  24. Neville Francis & Valerie A. Ramey, 2005. "A Century of Work and Leisure," 2005 Meeting Papers 250, Society for Economic Dynamics.
  25. Lorentzen, Peter L. & McMillan, John & Wacziarg, Romain, 2005. "Death and Development," CEPR Discussion Papers 5246, C.E.P.R. Discussion Papers.
  26. Strulik, Holger, 2002. "The Role of Human Capital and Population Growth in R&D-Based Models of Economic Growth," Royal Economic Society Annual Conference 2002 170, Royal Economic Society.
  27. 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.
  28. repec:hal:cesptp:hal-00659868 is not listed on IDEAS
  29. Sebnem Kalemli-Ozcan, 2008. "The uncertain lifetime and the timing of human capital investment," Journal of Population Economics, Springer, vol. 21(3), pages 557-572, July.
  30. de la Croix, David & Licandro, Omar, 1997. "Life expectancy and endogenous growth," Discussion Papers (IRES - Institut de Recherches Economiques et Sociales) 1997029, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES).
  31. Cervellati, Matteo & Sunde, Uwe, 2005. "Human capital formation, life expectancy, and the process of development," Munich Reprints in Economics 20083, University of Munich, Department of Economics.
  32. Oded Galor, 2004. "From Stagnation to Growth: Unified Growth Theory," GE, Growth, Math methods 0409003, EconWPA.
  33. Robert J. Gordon, 1999. "U.S. Economic Growth since 1870: One Big Wave?," American Economic Review, American Economic Association, vol. 89(2), pages 123-128, May.
  34. 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.
  35. Rodrigo R. Soares, 2004. "Mortality Reductions, Educational Attainment, and Fertility Choice," Econometric Society 2004 North American Winter Meetings 9, Econometric Society.
  36. Moshe Hazan, 2009. "Longevity and Lifetime Labor Supply: Evidence and Implications," Econometrica, Econometric Society, vol. 77(6), pages 1829-1863, November.
  37. Casper Hansen & Lars Lønstrup, 2012. "Can higher life expectancy induce more schooling and earlier retirement?," Journal of Population Economics, Springer, vol. 25(4), pages 1249-1264, October.
  38. Javier Birchenall, 2007. "Escaping high mortality," Journal of Economic Growth, Springer, vol. 12(4), pages 351-387, December.
Full references (including those not matched with items on IDEAS)

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

When requesting a correction, please mention this item's handle: RePEc:zbw:cegedp:141. 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: (ZBW - German National Library of Economics)

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 references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link 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 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.

This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.