Endogenous Longevity and Economic Growth

Jocelyn E. Finlay ()

PGDA Working Papers from Program on the Global Demography of Aging

Abstract: In a two period overlapping generations model of endogenous longevity and economic growth, individuals choose to invest in health and education. The investments are costly in terms of foregone first period consumption and the benefit is in the second period where health has the effect of increasing the probability of survival, and education investment will bring higher income. These investments are risky as survival through period two, when the payoffs can be had, is not certain. Individuals with varying degrees of risk aversion will choose the ordering in which they invest in health and education. It is only when investment in education is achieved that an economy will experience endogenous growth.

Keywords: Endogenous Longevity; Endogenous Growth; Health; Risk (search for similar items in EconPapers)
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Date: 2006-09
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