Growth and Welfare under Endogenous Lifetime

Maik Schneider and Ralph Winkler

No 10/137, CER-ETH Economics working paper series from CER-ETH - Center of Economic Research (CER-ETH) at ETH Zurich

Abstract: We develop a perpetual youth model to investigate how longevity affects economic growth and welfare. Life expectancy is determined by individuals’ investments in healthcare. We find that improvements in the healthcare technology always increase the steady state growth rate. Although the effect is small, even for large increases in longevity, welfare gains may be substantial depending on the type of the technological improvement. We identify two externalities associated with healthcare investments and provide a condition when healthcare expenditures are inefficiently low in the market equilibrium. Finally, we discuss our results with respect to alternative spillover specifications in the production sector.

Keywords: economic growth; endogenous longevity; healthcare expenditures; healthcare technology; quality-quantity trade-off (search for similar items in EconPapers)
JEL-codes: I10 J10 O40 (search for similar items in EconPapers)
Pages: 43 pages
Date: 2010-09
New Economics Papers: this item is included in nep-dge, nep-fdg and nep-hea
References: View complete reference list from CitEc
Citations: View citations in EconPapers (17)

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Related works:
Journal Article: Growth and Welfare under Endogenous Lifetimes (2021)
Working Paper: Growth and Welfare under Endogenous Lifetime (2017)
Working Paper: Growth and Welfare under Endogenous Lifetime (2013)
Working Paper: Growth and Welfare under Endogenous Lifetime (2010)
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Persistent link: https://EconPapers.repec.org/RePEc:eth:wpswif:10-137

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