Does longevity improvement always raise the length of schooling through the longer-horizon mechanism?

Sau-Him Lau
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Sau-Him Lau: University of Hong Kong

No 292, 2013 Meeting Papers from Society for Economic Dynamics

Abstract: Hazan (2009) performs empirical analysis based on the conjecture that a necessary condition for higher life expectancy to cause longer schooling years is that it also increases lifetime labor supply, and reaches controversial conclusions. We aim to examine the theoretical validity of Hazan's (2009) conjecture, and more generally, to understand the relation between these two conditions in a standard life-cycle model. We find that the relation between the effects on optimal schooling years and expected lifetime labor supply differs systematically with respect to mortality reductions at different stages of the life cycle. Based on these systematic differences, we find that longer lifetime labor supply is not sufficient for increased schooling years for mortality reductions during the schooling years, and not necessary for increased schooling years for some mortality reductions during the working years. We provide explanations regarding why Ben-Porath’s (1967) longer-horizon mechanism in the analysis of the timing of human capital investment is not always applicable to the question regarding the impact of mortality decline on human capital investment.

Date: 2013
New Economics Papers: this item is included in nep-age, nep-dem and nep-dge
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Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:red:sed013:292

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