Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/76747
Authors: 
Schneider, Maik T.
Winkler, Ralph
Year of Publication: 
2010
Series/Report no.: 
Discussion Papers, Department of Economics, Universität Bern 10-13
Abstract: 
We develop a perpetual youth model to investigate how longevity affects economic growth and welfare. Life expectancy is determined by individuals' investments in healthcare. We find that improvements in the healthcare technology always increase the steady state growth rate. Although the effect is small, even for large increases in longevity, welfare gains may be substantial depending on the type of the technological improvement. We identify two externalities associated with healthcare investments and provide a condition when healthcare expenditures are inefficiently low in the market equilibrium. Finally, we discuss our results with respect to alternative spillover specifications in the production sector.
Subjects: 
economic growth
endogenous longevity
healthcare expenditures
healthcare technology
quality-quantity trade-off
JEL: 
O40
I10
J10
Document Type: 
Working Paper

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