Life expectancy and income: The Ben-Porath mechanism revisited

Casper Hansen and Lars Lønstrup

No 3/2011, Discussion Papers on Economics from University of Southern Denmark, Department of Economics

Abstract: In this paper we show that it may be optimal for individuals to educate themselves more and decrease future labor supply (choose earlier retirement) when life expectancy increases. This result reconciles the findings of Hazan [Hazan, M., 2009. Longevity and Lifetime Labor Supply: Evidence and Implications. Econometrica 77, 1829.1863] with theory. Further, the paper contributes to a better understanding of the conflicting empirical findings on the causal effect on income per capita from increased life expectancy.

Keywords: Life-cycle model; life expectancy; schooling; retirement (search for similar items in EconPapers)
JEL-codes: D91 J22 J24 J26 O11 (search for similar items in EconPapers)
Pages: 14 pages
Date: 2011-02-16
New Economics Papers: this item is included in nep-age, nep-dem, nep-hea and nep-lab
Note: Link: http://static.sdu.dk/mediafiles//8/1/0/%7B810F9BC8-342F-4A34-84E2-A9CF4054163D%7Ddpbe3_2011.pdf
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Citations: View citations in EconPapers (1)

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