Probabilistic Aging

Dominik Grafenhofer, Christian Jaag, Christian Keuschnigg and Mirela Keuschnigg ()

No 1680, CESifo Working Paper Series from CESifo

Abstract: The paper develops an overlapping generations model with probabilistic aging of households. We define age as a set of personal attributes such as earnings potential, health and tastes that are characteristic of a person's position in the life-cycle. In assuming a limited number of different states of age, we separate the concepts of age and time since birth. Agents may retain their age characteristics for several periods before they move with a given probability to another state of age. Different generations that share the same age characteristics are aggregated analytically to a low number of age groups. The probabilistic aging model thus allows for a very parsimonious yet rather close approximation of demographic structure and life-cycle differences in earnings, wealth and consumption. Existing classes of overlapping generations models follow as special cases.

Keywords: overlapping generations; aging; demographics; life-cycle earnings (search for similar items in EconPapers)
Date: 2006
New Economics Papers: this item is included in nep-dge and nep-pbe
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (8)

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Working Paper: Probabilistic Aging (2005)
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Persistent link: https://EconPapers.repec.org/RePEc:ces:ceswps:_1680

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