On the fiscal treatment of life expectancy related choices

Julio Dávila and Marie-Louise Leroux

No 2009060, LIDAM Discussion Papers CORE from Université catholique de Louvain, Center for Operations Research and Econometrics (CORE)

Abstract: In an overlapping generations economy setup we show that, if individuals can improve their life expectancy by exerting some effort, costly in terms of either resources or utility, the competitive equilibrium steady state differs from the first best steady state. This is due to the fact that under perfect competition individuals fail to anticipate the impact of their longevity-enhancing effort on the return of their annuitized savings. We identify the policy instruments required to implement the first-best into a competitive equilibrium and show that they are specific to the form, whether utility or resources, that the effort takes.

Keywords: life expectancy; health expenditures; taxation (search for similar items in EconPapers)
JEL-codes: D91 H21 (search for similar items in EconPapers)
Date: 2009-09-01
New Economics Papers: this item is included in nep-dge and nep-hea
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Related works:
Working Paper: On the fiscal treatment of life expectancy related choices (2009)
Working Paper: On the fiscal treatment of life expectancy related choices (2009)
Working Paper: On the fiscal treatment of life expectancy related choices (2009)
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Persistent link: https://EconPapers.repec.org/RePEc:cor:louvco:2009060

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