Life expectancy, schooling, and lifetime labor supply: Theory and evidence revisited

This paper presents a theoretical and empirical analysis of the role of life expectancy for optimal schooling and lifetime labor supply. The results of a simple prototype Ben-Porath model with age-specific survival rates show that an increase in lifetime labor supply is not a necessary, or a suffici...

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Bibliographic Details
Published in:Econometrica 2013-09, Vol.81 (5), p.2055-2086
Main Authors: Cervellati, Matteo, Sunde, Uwe
Format: Article
Language:English
Subjects:
Age
Alter
Altersabhängigkeit
Arbeitszeitentwicklung
Ausbildungszeit
Auswirkung
Berufsverlauf
Bildung
Bildungsertrag
Bildungskosten
Economic models
Einkommensentwicklung
Empirical research
Erwerbsverhalten
Hours of work
Human capital
Investition
Labor economics
Labor markets
Labor supply
Labour supply
Lebensarbeitszeit
Lebenseinkommen
Lebenserwartung
Lebenslauf
Life expectancy
lifetime labor supply
Longevity
Mann
Mortality
NOTES AND COMMENTS
Quantitative analysis
Recreation
rectangularization of the survival function
Reliability functions
School age population
Schooling
Schools
Sterblichkeit
Studies
Survival analysis
Survival rates
U.S.A
USA
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Summary:This paper presents a theoretical and empirical analysis of the role of life expectancy for optimal schooling and lifetime labor supply. The results of a simple prototype Ben-Porath model with age-specific survival rates show that an increase in lifetime labor supply is not a necessary, or a sufficient, condition for greater life expectancy to increase optimal schooling. The observed increase in survival rates during working ages that follows from the "rectangularization" of the survival function is crucial for schooling and labor supply. The empirical results suggest that the relative benefits of schooling have been increasing across cohorts of U.S. men born between 1840 and 1930. A simple quantitative analysis shows that a realistic shift in the survival function can lead to an increase in schooling and a reduction in lifetime labor hours.
ISSN:1468-0262
0012-9682
1468-0262
DOI:10.3982/ECTA11169