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

Matteo Cervellati and Uwe Sunde

No 7286, IZA Discussion Papers from IZA Network @ LISER

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 men 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: rectangularization of the survival function; longevity; life expectancy; schooling; lifetime labor supply (search for similar items in EconPapers)
JEL-codes: E20 J22 J24 J26 O11 (search for similar items in EconPapers)
Pages: 34 pages
Date: 2013-03
New Economics Papers: this item is included in nep-dem, nep-dge, nep-hea, nep-hrm, nep-lab and nep-mac
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (120)

Published - published in: Econometrica, 2013, 81 (5), 2055–2086

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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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