Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/70224
Authors: 
Strulik, Holger
Werner, Katharina
Year of Publication: 
2012
Series/Report no.: 
Discussion Papers, Center for European Governance and Economic Development Research 141
Abstract: 
We set up a simple overlapping generation model that allows us to distinguish between life expectancy and active life expectancy. We show that individuals optimally adjust to a longer active life by educating more and, if the labor supply elasticity is high enough, by supplying less labor. When calibrated to US data the model explains the historical evolution of increasing education and declining labor supply (of cohorts born 1850-1950) as an optimal response to increasing active life expectancy. We integrate the theory into a unified growth model and reestablish increasing life expectancy as an engine of long-run economic development.
Subjects: 
longevity
active life expectancy
education
hours worked
economic growth.
JEL: 
E20
I25
J22
O10
O40
Document Type: 
Working Paper

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