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Growth and Welfare under Endogenous Lifetime

Maik Schneider () and Ralph Winkler ()

VfS Annual Conference 2013 (Duesseldorf): Competition Policy and Regulation in a Global Economic Order from Verein für Socialpolitik / German Economic Association

Abstract: Welfare aspects of longevity increases are often discussed neglecting the complex relationship between longevity and economic growth, which is the focal point of another literature. Combining both perspectives, we develop an endogenous growth OLG-framework to investigate how longevity affects economic growth and welfare. In our model, life expectancy is determined endogenously by individuals' investments in healthcare. In our benchmark specification growth effects are small, but direct welfare gains from longer lifetimes can be substantial. In the generalized model specification the growth effect dominates and may even lead to overall welfare losses from longevity increases. We interpret our results with respect to real world data and discuss the importance of assumptions about the engine of growth as well as the externalities associated with healthcare investments.

JEL-codes: O10 I10 J10 (search for similar items in EconPapers)
Date: 2013
New Economics Papers: this item is included in nep-dge and nep-gro
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https://www.econstor.eu/bitstream/10419/80018/1/VfS_2013_pid_108.pdf (application/pdf)

Related works:
Working Paper: Growth and Welfare under Endogenous Lifetime (2017) Downloads
Working Paper: Growth and Welfare under Endogenous Lifetime (2010) Downloads
Working Paper: Growth and Welfare under Endogenous Lifetime (2010) Downloads
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:vfsc13:80018

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