Adult Longevity and Growth Takeoff

Daishin Yasui ()
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Daishin Yasui: Graduate School of Economics, Kobe University

No 1218, Discussion Papers from Graduate School of Economics, Kobe University

Abstract: This paper develops an overlapping generations model in which agents make educational and fertility decisions under life-cycle considerations, and retirement from work is distinguished from death. This model sheds light on a novel mechanism that links life expectancy, retirement, education, fertility, and growth. Gains in adult longevity induce agents to save more for retirement, reduce fertility, invest in education, and achieve sustained growth. Even if the length of working life is shortened by early retirement, this mechanism works as long as adult longevity increases sufficiently. Our model replicates the stylized facts of the transition from stagnation to growth in terms of longevity, time in retirement, fertility, education, and income, as well as reconciles the theory that gains in life expectancy trigger a growth takeoff by increasing education with the observation that the length of working life is not substantially prolonged because of retirement. This study provides a framework for considering the joint determination of education, fertility, and retirement.

Keywords: Fertility; Growth; Human capital; Life expectancy; Retirement (search for similar items in EconPapers)
JEL-codes: J13 O11 (search for similar items in EconPapers)
Pages: 36pages
Date: 2012-08
New Economics Papers: this item is included in nep-age, nep-dem, nep-dge, nep-evo, nep-hea and nep-lab
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