The Cost of Uncertain Life Span

No 14093, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: A considerable amount of uncertainty surrounds life expectancy at birth, the average length of life. The standard deviation in adult life spans is about 15 years in the U.S., and theory and evidence suggest it is costly. In this paper, I calibrate a standard intertemporal model to show that one less year in standard deviation is worth about half a mean life year. Differences in the standard deviation amplify measured differences in life expectancy between the U.S. and other industrialized countries, and accounting for historical gains against the standard deviation raises the total value of mortality declines during the last century by about 25 percent.

JEL-codes: I10 J11 J17 O11 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-hea and nep-his
Date: Written 2008-06
Note: AG EFG HE
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