Life expectancy and income: The Ben-Porath mechanism revisited
نویسنده
چکیده
In this paper we show that it may be optimal for individuals to educate themselves more and decrease future labor supply (choose earlier retirement) when life expectancy increases. This result reconciles the ndings of Hazan [Hazan, M., 2009. Longevity and Lifetime Labor Supply: Evidence and Implications. Econometrica 77, 18291863] with theory. Further, the paper contributes to a better understanding of the conicting empirical ndings on the causal e¤ect on income per capita from increased life expectancy. Keywords: Life-cycle model; life expectancy; schooling; retirement JEL Classi cation: D91; J22; J24; J26; O11 University of Southern Denmark, Campusvej 55, 5230 Odense. Email: [email protected] yWe thank Oded Galor, David Weil, Per Svejstrup and Peter Sandholt for useful suggestions. We also thank seminar participants at Brown University and University of Southern Denmark for comments
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