Skip to main content Accessibility help
×
Hostname: page-component-78c5997874-j824f Total loading time: 0 Render date: 2024-11-09T05:56:27.879Z Has data issue: false hasContentIssue false

The Public Economics of Changing Longevity

Published online by Cambridge University Press:  12 January 2022

Pierre Pestieau
Affiliation:
HEC, Université de Liège and CORE, Université Catholique de Louvain, Belgium

Summary

Our societies are witnessing a steady increase in longevity. This demographic evolution is accompanied by some convergence across countries, but at the same time substantial longevity inequalities persist within nations across income classes. This Element aims to survey some crucial implications of changing longevity on the design of optimal public policy. For that purpose, it first focuses on some difficulties raised by risky and varying lifetime for the representation of individual and social preferences. Then, it explore some central implications of changing longevity for optimal policy making, regarding prevention against premature death, pension policies, education, health care and long-term care. The author distinguishes between the case when longevity is partially the responsibility of individuals and the case when longevity is plainly exogenous.
Get access
Type
Element
Information
Online ISBN: 9781009170864
Publisher: Cambridge University Press
Print publication: 10 February 2022

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

References

Arias, E. (2014): United States life tables, 2009, National Vital Statistics Reports, vol. 62 no. 7, Hyattsville, MD, National Center for Health Statistics.Google ScholarPubMed
Atkinson, A. & Stiglitz, J. (1976): The design of tax structure: direct versus indirect taxation, Journal of Public Economics, 6 (1–2), 5575.CrossRefGoogle Scholar
Atkinson, A. & Stiglitz, J. (1980): Lectures on public economics, New York, McGraw-Hill.Google Scholar
Aumann, R. & Kurz, M. (1977): Power and taxes, Econometrica, 45, 1137–63.Google Scholar
Balia, S. & Jones, A. (2008): Mortality, lifestyle and socioeconomic status, Journal of Health Economics, 27 (1), 126.Google Scholar
Baurin, A. (2020): The limited power of socioeconomic status to predict longevity: implications for pension policy, LIDAM Discussion Papers IRES 2020019.Google Scholar
Becker, G. & Philipson, T. (1998): Old age longevity and mortality contingent claims, Journal of Political Economy, 106, 551–73.Google Scholar
Ben-Porath, Y. (1967): The production of human capital and the life-cycle of earnings, Journal of Political Economy, 75, 352–65.CrossRefGoogle Scholar
Bentham, J. (1789): An introduction to the principles of morals and legislation, London.CrossRefGoogle Scholar
Bernoulli, D. (1730): Specimen theoriae novae de mensura sortis (English translation: Exposition of a new theory on the measurement of risk), Econometrica, 22, 2336.CrossRefGoogle Scholar
Blackburn, K. & Cipriani, G. (2002): A model of longevity, fertility and growth, Journal of Economic Dynamics and Control, 26, 187204.CrossRefGoogle Scholar
Bloom, D., Canning, D., & Moore, M. (2007): A theory of retirement, NBER Working Papers 13630.Google Scholar
Bommier, A. (2006): Uncertain lifetime and intertemporal choice: risk aversion as a rationale for time discounting, International Economic Review, 47 (4), 1223–46.Google Scholar
Bommier, A. (2007): Risk aversion, intertemporal elasticity of substitution and correlation aversion, Economics Bulletin, 29, 18.Google Scholar
Bommier, A. (2010): Portfolio choice under uncertain lifetime, Journal of Public Economic Theory, 12 (1), 5773.CrossRefGoogle Scholar
Boucekkine, R., Diene, B., & Azomahou, T. (2008): Growth economics of epidemics: a review of the theory, Mathematical Population Studies, 15 (1), 126.CrossRefGoogle Scholar
Broome, J. (2004): Weighing lives, New York, Oxford University Press.Google Scholar
Case, A. & Deaton, A. (2020): Deaths of despair and the future of capitalism, Princeton University Press.Google Scholar
Chakraborty, S. (2004): Endogenous lifetime and economic growth, Journal of Economic Theory, 116, 119–37.Google Scholar
Christensen, K., Johnson, T., & Vaupel, J. (2006): The quest for genetic determinants of human longevity: challenges and insights, Nature Reviews - Genetics, 7, 436–48.Google Scholar
Contoyannis, P. & Jones, A. (2004): Socio-economic status, health and lifestyle, Journal of Health Economics, 23, 965–95.CrossRefGoogle ScholarPubMed
Cremer, H., Dedonder, P., Maldonado, D., & Pestieau, P. (2012): Taxing sin goods and subsidizing health care, Scandinavian Journal of Economics, forthcoming.Google Scholar
Dedry, A., Onder, H., & Pestieau, P. (2018): Aging, social security design and capital accumulation, Journal of the Economics of Aging, 9, 145–55.Google Scholar
de la Croix, D. & Licandro, O. (1999): Life expectancy and endogenous growth, Economics Letters, 65, 255–63.Google Scholar
de la Croix, D. & Licandro, O. (2012): The child is the father of the man: implications for the demographic transition, Economic Journal, 123, 236–61.Google Scholar
Diamond, P. & Spinnewijn, J. (2011): Capital income taxes with heterogeneous discount rates, American Economic Journal: Economic Policy, 3 (4), 5276.Google Scholar
Eeckhoudt, L. & Pestieau, P. (2008): Fear of ruin and longevity enhancing investment, Economics Letters, 101, 57–9.Google Scholar
Ehrlich, I. & Lui, F. (1991): Intergenerational trace, longevity and economic growth, Journal of Political Economy, 1029–60.CrossRefGoogle Scholar
Flaxman, S. et al. (2020): Estimating the effects of non-pharmaceutical interventions on COVID-19 in Europe, Nature, 584, 257–61.CrossRefGoogle ScholarPubMed
Fleurbaey, M. (2008): Fairness, responsibility and welfare, New York, Oxford University Press.Google Scholar
Fleurbaey, M., Leroux, M.-L., & Ponthière, G., (2014): Compensating the dead, Journal of Mathematical Economics, 51, 2841.CrossRefGoogle Scholar
Fleurbaey, M. & Maniquet, F. (2004): Compensation and responsibility, in Arrow, K., Sen, A., & Suzumura, K. (eds.), Handbook of social choice and welfare, vol 2., Amsterdam, North-Holland.Google Scholar
Foncel, J. & Treich, N. (2005): Fear of ruin, Journal of Risk and Uncertainty, 31, 289300.Google Scholar
Fong, G., Hammond, D., Laux, F., Zanna, M., Cummings, M., Borland, R., & R. Hana (2004): The near experience of regret among smokers in four countries: findings from the International Tobacco Control Policy Evaluation Survey, Nicotine and Tobacco Research, 6, S341S351.Google Scholar
Heijdra, B. & Mierau, J. (2011): The individual life cycle and economic growth: an essay on demographic macroeconomics, The De Economist, 159, 6387.Google Scholar
Hendi, A. (2017): Trends in education-specific life expectancy, data quality and shifting education distributions: a note on recent research, Demography, 54, 1203–13.CrossRefGoogle ScholarPubMed
Database, Human Mortality (2012): University of California, Berkeley (USA), Max Planck Institute for Demographic Research (Germany), available at www.mortality.org. Data downloaded on August 2012.Google Scholar
Ito, H. & Tabata, K. (2008): Demographic structure and growth: the effect of unfunded social security, Economics Letters, 100, 288–91.Google Scholar
Jarvis, M., McIntyre, D., & Bates, Clive (2002): Effectiveness of smoking cessation initiatives, British Medical Journal, 324, 608.Google Scholar
Jouvet, P.-A., Pestieau, P., & Ponthière, G. (2010): Longevity and environmental quality in an OLG model, Journal of Economics, 100, 191216.CrossRefGoogle Scholar
Kalemli-Ozcan, S., Ryder, H., & Weil, David (2000): Mortality decline, human capital investment, and economic growth, Journal of Development Economics, 62, 123.Google Scholar
Kaplan, G., Seeman, T., Cohen, R., Knudsen, L., & Guralnik, J. (1987): Mortality among the elderly in the Almeda county study: behavioral and demographic risk factors, American Journal of Public Health, 77, 307–12.Google Scholar
Klimaviciute, J., Pestieau, P., & Onder, H. (2019): Inherited wealth and demographic aging, German Economic Review, 20, 4, 872–91.Google Scholar
Kremer, M. (1993) Population growth and technological change: one billion B.C. to 1990, Quarterly Journal of Economics, 108, 681716.Google Scholar
Lefèbvre, M., Perelman, S., & Schoenmaeckers, J. (2018): Inégalités face à la mort et au risque de dépendance, Revue Française d’Economie, 33, 75112.Google Scholar
Lefèbvre, M., Pestieau, P., & Ponthière, G. (2018): FGT poverty measures and the mortality paradox. Theory and evidence, Review of Income and Wealth, 64, 428–58.Google Scholar
Lefèbvre, M., Pestieau, P., & Ponthière, G. (2019a): Premature mortality and poverty measurement in an OLG economy, Journal of Population Economics, 32, 621–64.Google Scholar
Lefèbvre, M., Pestieau, P. & Ponthière, G. (2019b): Missing poor and income mobility, Journal of Comparative Economics, 47, 330–66.Google Scholar
Leker, L. & Ponthière, G. (2015): Education, life expectancy and family bargaining: the Ben-Porath effect revisited, Education Economics, 23, 481513.CrossRefGoogle Scholar
Leroux, M.-L., Pestieau, P., & Ponthière, G. (2011a): Longevity, genes and effort: an optimal taxation approach to prevention, Journal of Health Economics, 30 (1), 6275.Google Scholar
Leroux, M.-L., Pestieau, P., & Ponthière, G. (2011b): Optimal linear taxation under endogenous longevity, Journal of Population Economics, 24 (1), 213–37.Google Scholar
Leroux, M.-L. & Ponthière, G. (2009): Optimal tax policy and expected longevity: a mean-variance utility approach, International Tax and Public Finance, 16, 514–37.Google Scholar
Leroux, M.-L. & Pestieau, P. (2021): Age and health related inheritance taxation, CORE DP 2021/02.Google Scholar
Lutz, W., Amran, G., & Belanger, A. (2019): Demographic scenarios for the EU–migration, population and education, Brussels, publications Office of the European Union.Google Scholar
Marois, G., Bélanger, A., & Lutz, W. (2020): Population aging, migration, and productivity in Europe, www.researchgate.net/publication/340105385_Population_aging_migration_and_productivity_in_EuropeGoogle Scholar
Miyazawa, K. (2006): Growth and inequality: a demographic explanation, Journal of Population Economics, 19, 559–78.Google Scholar
Newman, S. (2019): Supercentenarians and the oldest-old are concentrated into regions with no birth certificates and short lifespans, Researchgate.Google Scholar
Nishimura, Y. & Pestieau, P. (2016): Efficient taxation with differential risks of dependence and mortality, Economics Bulletin, 36 (1), 52–7.Google Scholar
Nishimura, Y., Pestieau, P., & Ponthière, G. (2018): Education choices, longevity and optimal policy in a Ben-Porath economy, Journal of Mathematical Social Sciences, 94, 6581.CrossRefGoogle Scholar
Nishimura, Y. & Pestieau, P. (2021): Old age or dependence. Which social insurance? Unpublished.Google Scholar
Nusselder, W. & Mackenbach, J. (2000): Lack of improvement of life expectancy at advanced ages in the Netherlands, International Journal of Epidemiology, 29, 140–8.Google Scholar
OECD (2018): The role and design of net wealth taxes in the OECD, OECD Tax Policy Studies, Paris, OECD.Google Scholar
OECD (2020): Ageing and employment policies – statistics on average effective age of retirement, Paris, OECD.Google Scholar
Parfit, D. (1984): Reasons and persons, New York, Oxford University Press.Google Scholar
Pestieau, P. & Ponthière, G. (2014a): On the policy implications of changing longevity, CESifo Economic Studies, 60, 178213.Google Scholar
Pestieau, P. & Ponthière, G. (2014b): Longevity variations and the welfare state, Journal of Demographic Economy, 82, 216–39.Google Scholar
Pestieau, P. & Racionero Llorente, M. (2016): Harsh occupations, life expectancy and social security, Economic Modelling, 58, 194202.Google Scholar
Pestieau, P., Ponthière, G., & Sato, M. (2008): Longevity, health spendings and PAYG pensions, FinanzArchiv – Public Finance Analysis, 64 (1), 118.Google Scholar
Pestieau, P. & Ponthière, G. (2022): Optimal lockdown and social welfare. Journal of Population Economics, 35:241268.Google Scholar
Piketty, T. & Saez, E. (2013): A theory of optimal inheritance taxation, Econometrica, 81 (5), 1851–86.Google Scholar
Raffin, N. & Seegmuller, T. (2014): Longevity, pollution and growth, Mathematical Social Sciences, 69, 2233.Google Scholar
Rawls, J. (1971): A theory of justice, Cambridge, MA: Harvard University Press.Google Scholar
Rochet, J.-C. (1991): Incentives, redistribution and social insurance, Geneva Risk and Insurance Review, 16 (2), 143–65.Google Scholar
Samuelson, P. (1975): The optimum growth rate for population, International Economic Review, 16, 531–8.Google Scholar
Sen, A. K. (1998): Mortality as an indicator of economic success and failure, Economic Journal, 108, 125.Google Scholar
Slovic, P. (2001): Cigarette smokers: rational actors or rational fools?, in Slovic, P. (ed.), Smoking: risk, perception, and policy, pp. 97126, Thousand Oaks, CA: Sage.Google Scholar
Tabata, K. (2014): Population aging and growth: the effect of PAYG pension reform. Unpublished.Google Scholar
Teixeira, L., Araujo, L., Paul, C., & Ribeiro, O. (2020): Centenarians. A European overview, Springer Briefs in Aging, Springer.Google Scholar
Nations, United (2001): Replacement migration: is it a solution to declining and ageing populations? New York, United Nations, Department of Economic and Social Affairs, Population Division.Google Scholar
Vickrey, W. (1945): An integrated successions tax. Republished in R. Arnott, Arrow, K., Atkinson, A., & Dreze, J. (eds.) (1994): Public economics. Selected papers by William Vickrey, Cambridge University Press.Google Scholar
Wendling, Z., Sherbinin, A., Emerson, J., & Esty, D. (2020) Environmental performance index, Yale Center for Environmental Law and Policy.Google Scholar
Yaari, M. (1965): Uncertain lifetime, life insurance and the theory of the consumer, Review of Economic Studies, 32, 137–50.Google Scholar
Zhang, J., Zhang, J., & Lee, R. (2001): Mortality decline and long-run economic growth, Journal of Public Economics, 80, 485507.Google Scholar
Zhang, J., Zhang, J., & Lee, R. (2003): Rising longevity, education, savings and growth, Journal of Development Economics, 70, 83101.Google Scholar

Save element to Kindle

To save this element to your Kindle, first ensure [email protected] is added to your Approved Personal Document E-mail List under your Personal Document Settings on the Manage Your Content and Devices page of your Amazon account. Then enter the ‘name’ part of your Kindle email address below. Find out more about saving to your Kindle.

Note you can select to save to either the @free.kindle.com or @kindle.com variations. ‘@free.kindle.com’ emails are free but can only be saved to your device when it is connected to wi-fi. ‘@kindle.com’ emails can be delivered even when you are not connected to wi-fi, but note that service fees apply.

Find out more about the Kindle Personal Document Service.

The Public Economics of Changing Longevity
  • Pierre Pestieau, HEC, Université de Liège and CORE, Université Catholique de Louvain, Belgium
  • Online ISBN: 9781009170864
Available formats
×

Save element to Dropbox

To save content items to your account, please confirm that you agree to abide by our usage policies. If this is the first time you use this feature, you will be asked to authorise Cambridge Core to connect with your account. Find out more about saving content to Dropbox.

The Public Economics of Changing Longevity
  • Pierre Pestieau, HEC, Université de Liège and CORE, Université Catholique de Louvain, Belgium
  • Online ISBN: 9781009170864
Available formats
×

Save element to Google Drive

To save content items to your account, please confirm that you agree to abide by our usage policies. If this is the first time you use this feature, you will be asked to authorise Cambridge Core to connect with your account. Find out more about saving content to Google Drive.

The Public Economics of Changing Longevity
  • Pierre Pestieau, HEC, Université de Liège and CORE, Université Catholique de Louvain, Belgium
  • Online ISBN: 9781009170864
Available formats
×