Longevity and Life‐cycle Savings*
David Canning () and
Bryan Graham ()
Scandinavian Journal of Economics, 2003, vol. 105, issue 3, 319-338
We add health and longevity to a standard model of life‐cycle saving and show that, under plausible assumptions, increases in life expectancy lead to higher savings rates at every age, even when retirement is endogenous. In a stationary population these higher savings rates are offset by increased old age dependency, but during the disequilibrium phase, when longevity is rising, the effect on aggregate savings rates can be substantial. We find empirical support for this effect using a cross‐country panel of national savings rates.
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Working Paper: Longevity and Life Cycle Savings (2002)
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Persistent link: https://EconPapers.repec.org/RePEc:bla:scandj:v:105:y:2003:i:3:p:319-338
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