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Longevity and Companionship in an Overlapping-Generations Model

Author

Listed:
  • Gylfi Zoega

    (University of Iceland; Birkbeck, University of London)

  • Marias H. Gestsson

    (University of Iceland)

Abstract

We derive a golden rule for the level of life-extending health care when the utility of the old depends not only their level of consumption but also on the number of old people alive. While previous work has emphasized the negative pecuniary externality from longevity, we derive the effect of the positive non-pecuniary externality of being able to consume with other members of one’s cohort.

Suggested Citation

  • Gylfi Zoega & Marias H. Gestsson, 2018. "Longevity and Companionship in an Overlapping-Generations Model," Birkbeck Working Papers in Economics and Finance 1811, Birkbeck, Department of Economics, Mathematics & Statistics.
    • Handle: RePEc:bbk:bbkefp:1811
    as

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    File URL: https://eprints.bbk.ac.uk/id/eprint/26845
    File Function: First version, 2018
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    References listed on IDEAS

    as
    1. Torben M. Andersen & Joydeep Bhattacharya, 2014. "A dynamic‐efficiency rationale for public investment in the health of the young," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 47(3), pages 697-719, August.
    2. Robert E. Hall & Charles I. Jones, 2007. "The Value of Life and the Rise in Health Spending," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 122(1), pages 39-72.
    3. Ben J. Heijdra & Jochen O. Mierau & Laurie S. M. Reijnders, 2010. "The Tragedy of Annuitization," CESifo Working Paper Series 3141, CESifo.
    4. Blanchard, Olivier J, 1985. "Debt, Deficits, and Finite Horizons," Journal of Political Economy, University of Chicago Press, vol. 93(2), pages 223-247, April.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Longevity; health care expenditures; companionship.;
    All these keywords.

    JEL classification:

    • E6 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook
    • E2 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment
    • I1 - Health, Education, and Welfare - - Health

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