Probabilistic Aging

Dominik Grafenhofer, Christian Jaag, Christian Keuschnigg and Mirela Keuschnigg ()

University of St. Gallen Department of Economics working paper series 2005 from Department of Economics, University of St. Gallen

Abstract: The paper develops an overlapping generations model with probabilistic aging of households. We define age as a set of personal attributes such as earnings potential, health and tastes that are characteristic of a person's position in the life-cycle. In assuming a limited number of different states of age, we separate the concepts of age and time since birth. Agents may retain their age characteristics for several periods before they move with a given probability to another state of age. Different generations that share the same age characteristics are aggregated analytically to a low number of age groups. The probabilistic aging model thus allows for a very parsimonious yet rather accurate approximation of demographic change and of life-cycle differences in earnings, wealth and consumption. Existing classes of overlapping generations models follow as special cases.

JEL-codes: D58 D91 H55 J21 (search for similar items in EconPapers)
Pages: 50 pages
Date: 2005-03
New Economics Papers: this item is included in nep-dge and nep-hea
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (16)

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Related works:
Working Paper: Probabilistic Aging (2006)
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Persistent link: https://EconPapers.repec.org/RePEc:usg:dp2005:2005-08

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