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Longevity, Growth and Intergenerational Equity - The Deterministic Case

Author

Listed:
  • Torben M. Andersen

    (School of Economics and Management, Aarhus University, Denmark)

  • Marias H. Gestsson

    (Central Bank of Iceland)

Abstract

Challenges raised by ageing (increasing longevity) have prompted policy debates featuring policy proposals justified by reference to some notion of intergenerational equity. However, very different policies ranging from pre-savings to indexation of retirement ages have been justified in this way. We develop an overlapping generations model in continuous time which encompasses different generations with different mortality rates and thus longevity. Allowing for both trend increases in longevity and productivity, we address the issue of intergenerational equity under a utilitarian criterion when future generations are better off in terms of both material and non-material well being. Increases in productivity and longevity are shown to have very different implications for intergenerational distribution.

Suggested Citation

  • Torben M. Andersen & Marias H. Gestsson, 2010. "Longevity, Growth and Intergenerational Equity - The Deterministic Case," Economics Working Papers 2010-19, Department of Economics and Business Economics, Aarhus University.
    • Handle: RePEc:aah:aarhec:2010-19
    as

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    File URL: https://repec.econ.au.dk/repec/afn/wp/10/wp10_19.pdf
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    References listed on IDEAS

    as
    1. Oecd, 2006. "Projecting OECD Health and Long-Term Care Expenditures: What Are the Main Drivers?," OECD Economics Department Working Papers 477, OECD Publishing.
    2. Sebnem Kalemli-Ozcan & David Weil, 2010. "Mortality change, the uncertainty effect, and retirement," Journal of Economic Growth, Springer, vol. 15(1), pages 65-91, March.
    Full references (including those not matched with items on IDEAS)

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    Cited by:

    1. Torben Andersen & Mikkel Hermansen, 2014. "Durable consumption, saving and retirement," Journal of Population Economics, Springer;European Society for Population Economics, vol. 27(3), pages 825-840, July.

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    More about this item

    Keywords

    OLG models; demographics; longevity; taxes; transfers; retirement age; dependency ratio; healthy ageing; decentralization;
    All these keywords.

    JEL classification:

    • J11 - Labor and Demographic Economics - - Demographic Economics - - - Demographic Trends, Macroeconomic Effects, and Forecasts

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