Longevity and Companionship in an Overlapping-Generations Model

Gylfi Zoega and Marias H. Gestsson
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Marias H. Gestsson: University of Iceland

No 1811, Birkbeck Working Papers in Economics and Finance from Birkbeck, Department of Economics, Mathematics & Statistics

Abstract: We derive a golden rule for the level of life-extending health care when the utility of the old depends not only their level of consumption but also on the number of old people alive. While previous work has emphasized the negative pecuniary externality from longevity, we derive the effect of the positive non-pecuniary externality of being able to consume with other members of one’s cohort.

Keywords: Longevity; health care expenditures; companionship. (search for similar items in EconPapers)
JEL-codes: E2 E6 I1 (search for similar items in EconPapers)
Date: 2018-11
New Economics Papers: this item is included in nep-age, nep-dge, nep-hea and nep-mac
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https://eprints.bbk.ac.uk/id/eprint/26845 First version, 2018

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