Note on Age, Wage and Suicide: Impacts of Wage Uncertainty on Suicide

This paper formalises an individual’s decision about suicide within a framework of lifetime-utility-maximisation models. This is in line with the literature on economic modelling of suicide. The novelty of the paper is to take into account income uncertainty. Income uncertainty reduces the expected utility of a risk-averse individual, making her/him more likely to commit suicide. On the other hand, income uncertainty creates a value to postponing suicide even when her/his income gets sufficiently low. This is because income uncertainty means that if things go well, she/he will get higher income in future. Thus, income uncertainty has two opposite effects on suicidal behaviour. The main objective of this paper is to construct an economic model of suicide for investigating net impacts of income uncertainty on suicidal behaviour. For this purpose, it is assumed that the wage evolves according to a stochastic process. Then, the threshold wage, below which an individual commits suicide, is derived as a function of the parameters of the stochastic process assumed for the wage evolution. Impacts of changes in these parameters on the threshold wage are calculated. With the result, the paper shows how income uncertainty affects suicidal behaviour.