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Title:Probabilistic aging PDF Logo
Authors:Grafenhofer, Dominik
Jaag, Christian
Keuschnigg, Christian
Keuschnigg, Mirela
Issue Date:2006
Series/Report no.:CESifo working papers 1680
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 close approximation of demographic structure and life-cycle differences in earnings, wealth and consumption. Existing classes of overlapping generations models follow as special cases.
Subjects:overlapping generations
aging
demographics
life-cycle earnings
JEL:J21
H55
D91
D58
Document Type:Working Paper
Appears in Collections:CESifo Working Papers, CESifo Group Munich

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