Optimal Aging and Death
Publikation: Working paper › Forskning
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Optimal Aging and Death. / Dalgaard, Carl-Johan Lars; Strulik, Holger.
Hannover, Germany, 2010.Publikation: Working paper › Forskning
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TY - UNPB
T1 - Optimal Aging and Death
AU - Dalgaard, Carl-Johan Lars
AU - Strulik, Holger
N1 - JEL classification: D91, J17, J26, I12
PY - 2010
Y1 - 2010
N2 - This study introduces physiological aging into a simple model of optimal intertemporalconsumption. In this endeavor we draw on the natural science literature onaging. According to the purposed theory, the speed of the aging process and the timeof death are endogenously determined by optimal health investments. At the same time,physiological aspects of the aging process influence optimal savings and health investment.We calibrate the model for the average US male in 2000 and proceed to show that thecalibrated model accounts well for the cross-country link between labor productivity andlife expectancy in the same year ("the Preston curve"); cross-country income differencescan explain differences in life expectancy at age 20 of up to a decade. Moreover, technologicalchange in health care of about 1.1% per year can account for the observed shift inthe Preston curve between 1980 and 2000.
AB - This study introduces physiological aging into a simple model of optimal intertemporalconsumption. In this endeavor we draw on the natural science literature onaging. According to the purposed theory, the speed of the aging process and the timeof death are endogenously determined by optimal health investments. At the same time,physiological aspects of the aging process influence optimal savings and health investment.We calibrate the model for the average US male in 2000 and proceed to show that thecalibrated model accounts well for the cross-country link between labor productivity andlife expectancy in the same year ("the Preston curve"); cross-country income differencescan explain differences in life expectancy at age 20 of up to a decade. Moreover, technologicalchange in health care of about 1.1% per year can account for the observed shift inthe Preston curve between 1980 and 2000.
KW - Faculty of Social Sciences
KW - aging
KW - longevity
KW - health investments
KW - savings
KW - Preston curve
M3 - Working paper
BT - Optimal Aging and Death
CY - Hannover, Germany
ER -
ID: 20921469