Life Expectancy, Schooling, and Lifetime Labor Supply: Theory and Evidence Revisited

Uwe Sunde and Matteo Cervellati

No 9399, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: This paper presents a theoretical and empirical analysis of the role of life expectancy for optimal schooling and lifetime labor supply. The results of a simple prototype Ben-Porath model with age-specific survival rates show that an increase in lifetime labor supply is not a necessary, nor a sufficient, condition for greater life expectancy to increase optimal schooling. The observed increase in survival rates during working ages that follows from the ``rectangularization'' of the survival function is crucial for schooling and labor supply. The empirical results suggest that the relative benefits of schooling have been increasing across cohorts of US man born 1840-1930. A simple quantitative analysis shows that a realistic shift in the survival function can lead to an increase in schooling and a reduction in lifetime labor hours.

Keywords: Life expectancy; Lifetime labor supply; Longevity; Rectangularization of the survival function; Schooling (search for similar items in EconPapers)
JEL-codes: E20 J22 J24 J26 O11 (search for similar items in EconPapers)
Date: 2013-03
New Economics Papers: this item is included in nep-age, nep-dem and nep-mac
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (115)

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Related works:
Journal Article: Life Expectancy, Schooling, and Lifetime Labor Supply: Theory and Evidence Revisited (2013)
Working Paper: Life Expectancy, Schooling, and Lifetime Labor Supply: Theory and Evidence Revisited (2013)
Working Paper: Life Expectancy, Schooling, and Lifetime Labor Supply: Theory and Evidence Revisited (2013)
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