Longevity, Growth and Intergenerational Equity - The Deterministic Case

Torben M. Andersen () and Marias H. Gestsson
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Torben M. Andersen: School of Economics and Management, Aarhus University, Denmark, Postal: 8000 Aarhus C, Denmark
Marias H. Gestsson: Central Bank of Iceland

Economics Working Papers from Department of Economics and Business Economics, Aarhus University

Abstract: Challenges raised by ageing (increasing longevity) have prompted policy debates featuring policy proposals justified by reference to some notion of intergenerational equity. However, very different policies ranging from pre-savings to indexation of retirement ages have been justified in this way. We develop an overlapping generations model in continuous time which encompasses different generations with different mortality rates and thus longevity. Allowing for both trend increases in longevity and productivity, we address the issue of intergenerational equity under a utilitarian criterion when future generations are better off in terms of both material and non-material well being. Increases in productivity and longevity are shown to have very different implications for intergenerational distribution.

Keywords: OLG models; demographics; longevity; taxes; transfers; retirement age; dependency ratio; healthy ageing; decentralization (search for similar items in EconPapers)
JEL-codes: J11 (search for similar items in EconPapers)
Pages: 55
Date: 2010-11-29
New Economics Papers: this item is included in nep-age, nep-dge and nep-hea
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:aah:aarhec:2010-19

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