Hostname: page-component-586b7cd67f-rdxmf Total loading time: 0 Render date: 2024-11-21T23:35:18.496Z Has data issue: false hasContentIssue false
  • English
  • Français

LONGEVITY VARIATIONS AND THE WELFARE STATE

Published online by Cambridge University Press:  13 May 2016

Pierre Pestieau  and
Gregory Ponthiere
Pierre Pestieau
Affiliation:
University of Liège, CORE, Belgium and Paris School of Economics, France
Gregory Ponthiere
Affiliation:
University Paris East (ERUDITE), Paris School of Economics and Institut universitaire de France (IUF), France. E-mail: [email protected]
Get access

Abstract:

Life expectancy at birth has more than doubled in Europe since the early 19th century. This demographic trend constitutes a major victory against scarcity, but raises also deep challenges to the Welfare State, concerning the sustainability and the equity of the social protection system. This paper surveys recent developments in the economic analysis of longevity, both at the positive and the normative levels. Taking mortality risks into account is shown to affect the study of the life cycle model significantly, in particular concerning the strength of life horizon effects. It raises also, at the level of normative foundations for policy-making, a dilemma between ex ante and ex post valuations. Finally, we explore the design of policy reforms under varying longevity, in fields including preventive and curative policies, education, pension, and wealth taxation.

Keywords

longevitymortality riskinequalitieslife cycleWelfare StateJ10J18H55
Type
Research Papers
Information
Journal of Demographic Economics , Volume 82 , Issue 2 , June 2016 , pp. 207 - 239
Copyright
Copyright © Université catholique de Louvain 2016 

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

REFERENCES

Arias, Elizabeth (2014) United States Life tables, 2009. National Vital Statistics Reports, vol. 62, no. 7, Hyattsville, MD, National Center for Health Statistics.Google Scholar
Balia, Silvia and Jones, Andrew (2008) Mortality, lifestyle and socio-economic status. Journal of Health Economics 27, 1–26.Google Scholar
Becker, Gary and Philipson, Thomas (1998) Old age longevity and mortality contingent claims. Journal of Political Economy 106, 551–573.Google Scholar
Ben Porath, Yoram (1967) The production of human capital and the life-cycle of earnings. Journal of Political Economy 75, 352–365.Google Scholar
Bentham, Jeremy (1789) An Introduction to the Principles of Morals and Legislation. London.CrossRefGoogle Scholar
Bernoulli, Daniel (1730) Specimen theoriae novae de mensura sortis. English translation: Exposition of a new theory on the measurement of risk. Econometrica 22, 23–36.CrossRefGoogle Scholar
Blackburn, Keith and Cipriani, Giam Pietro (2002) A model of longevity, fertility and growth. Journal of Economic Dynamics and Control 26, 187–204.Google Scholar
Bloom, David, Canning, David and Graham, Bryan (2003) Longevity and life-cycle savings. Scandinavian Journal of Economics 105, 319–338.Google Scholar
Bloom, David, Canning, David and Moore, Michael (2007) A theory of retirement. NBER Working Papers 13630.Google Scholar
Bommier, Antoine (2006) Uncertain lifetime and intertemporal choice: risk aversion as a rationale for time discounting. International Economic Review 47, 1223–1246.Google Scholar
Bommier, Antoine (2007) Risk aversion, intertemporal elasticity of substitution and correlation aversion. Economics Bulletin 29, 1–8.Google Scholar
Bommier, Antoine (2010) Portfolio choice under uncertain lifetime. Journal of Public Economic Theory 12, 57–73.CrossRefGoogle Scholar
Botero, Giovanni (1588) The causes of the Greatness of Cities, reprinted partly in The Population and Development Review 11, 335–340.CrossRefGoogle Scholar
Boucekkine, Raouf, Croix, David de la and Licandro, Omar (2002) Vintage human capital, demographic trends and endogenous growth. Journal of Economic Theory 104, 340–375.Google Scholar
Broome, John (2004) Weighing Lives. New-York: Oxford University Press.Google Scholar
Chakraborty, Shankha (2004) Endogenous lifetime and economic growth. Journal of Economic Theory 116, 119–137.CrossRefGoogle Scholar
Christensen, Kaare, Johnson, Thomas and Vaupel, James (2006) The quest for genetic determinants of human longevity: challenges and insights. Nature Reviews - Genetics 7, 436–448.Google Scholar
Contoyannis, Paul and Jones, Andrew (2004) Socio-economic status, health and lifestyle. Journal of Health Economics 23, 965–995.Google Scholar
Cremer, Helmuth, de Donder, Philippe, Maldonado, Dario, and Pestieau, Pierre (2012) Taxing sin goods and subsidizing health care. Scandinavian Journal of Economics 114, 101–123.CrossRefGoogle Scholar
d’Albis, Hippolyte and Thibault, Emmanuel (2010) Annuities, bequest and portfolio diversification. Journal of Public Economic Theory 12, 75–91.CrossRefGoogle Scholar
d’Albis, Hippolyte and Thibault, Emmanuel (2012) Optimal annuitization, uncertain survival probabilities and maxmin preferences. Economics Letters 116, 296–299.CrossRefGoogle Scholar
Davies, John and Kuhn, Peter (1992) Social security, longevity and moral hazard. Journal of Public Economics 52, 133–139.Google Scholar
Dedry, Antoine, Onder, Harun and Pestieau, Pierre (2014) Aging, social security design and capital accumulation. CORE Discussion Paper 2014-013.Google Scholar
de la Croix, David and Licandro, Omar (1999) Life expectancy and endogenous growth. Economics Letters 65, 255–263.CrossRefGoogle Scholar
de la Croix, David and Licandro, Omar (2013) The child is the father of Man: implications for the demographic transition. Economic Journal 123, 236–261.CrossRefGoogle Scholar
Easterlin, Richard (1999) How beneficent is the market? A look at the modern history of mortality. European Review of Economic History 3, 257–294.CrossRefGoogle Scholar
Echevarria, Cruz (2004) Life expectancy, retirement and endogenous growth. Economic Modelling 21, 147–174.CrossRefGoogle Scholar
Ehrlich, Isaac and Lui, Francis (1991) Intergenerational trade, longevity, and economic growth. Journal of Political Economy 99, 1029–1059.CrossRefGoogle Scholar
Fleurbaey, Marc (2008) Fairness, Responsibility and Welfare. New-York: Oxford University Press.CrossRefGoogle Scholar
Fleurbaey, Marc, Leroux, Marie-Louise and Ponthiere, Gregory (2014) Compensating the dead. Journal of Mathematical Economics 51, 28–41.CrossRefGoogle Scholar
Fleurbaey, Marc, Leroux, Marie-Louise, Pestieau, Pierre and Ponthiere, Gregory (2016) Fair retirement under risky lifetime. International Economic Review 57, 177–210.CrossRefGoogle Scholar
Fleurbaey, Marc and Ponthiere, Gregory (2013) Prevention against equality? Journal of Public Economics 103, 68–84.Google Scholar
Fogel, Robert (1994) Economic growth, population theory and physiology: the bearing of long-term processes on the making of economic policy. American Economic Review 84, 369–395.Google Scholar
Fogel, Robert (2004) Health, nutrition and economic growth. Economic Development and Cultural Change 52, 643–658.CrossRefGoogle Scholar
Fong, Geoffrey, Hammond, David, Laux, Fritz, Zanna, Mark, Cummings, Michael, Borland, Ron and Ross, Hana (2004) The near-universal experience of regret among smokers in four countries: findings from the International Tobacco Control Policy Evaluation Survey. Nicotine and Tobacco Research 6, S341–S351.CrossRefGoogle ScholarPubMed
Heijdra, Ben and Mierau, Jochen (2011) The individual life cycle and economic growth: an essay on demographic macroeconomics. De Economist 159, 63–87.CrossRefGoogle Scholar
Ito, Hiroyuki and Tabata, Ken (2008) Demographic structure and growth: The effect of unfunded social security. Economics Letters 100, 288–291.CrossRefGoogle Scholar
Jarvis, Martin, McIntyre, Doreen and Bates, Clive (2002) Effectiveness of smoking cessation initiatives. British Medical Journal 324, 608.Google Scholar
Kalemli-Ozcan, Sebnem, Ryder, Harl and Weil, David (2000) Mortality decline, human capital investment, and economic growth. Journal of Development Economics 62, 1–23.Google Scholar
Kinugasa, Tomoko and Mason, Andrew (2006) Why countries become wealthy: the effects of adult longevity on saving. World Development 35, 1–23.Google Scholar
Kremer, Michael (1993) Population growth and technological change: one billion B.C. to 1990. Quarterly Journal of Economics 108, 681–716.Google Scholar
Lee, Ronald (2003) The demographic transition: three centuries of fundamental change. Journal of Economic Perspectives 17, 167–190.Google Scholar
Leker, Laura and Ponthiere, Gregory (2015) Education, life expectancy and family bargaining: the Ben-Porath effect revisited. Education Economics 23, 481–513.CrossRefGoogle Scholar
Leroux, Marie-Louise, Pestieau, Pierre and Ponthiere, Gregory (2011) Optimal linear taxation under endogenous longevity. Journal of Population Economics 24, 213–237.Google Scholar
Leroux, Marie-Louise and Ponthiere, Gregory (2009) Optimal tax policy and expected longevity. A mean and variance utility approach. International Tax and Public Finance 16, 514–537.CrossRefGoogle Scholar
Leroux, Marie-Louise and Ponthiere, Gregory (2013) Utilitarianism and unequal longevities: a remedy? Economic Modelling 30, 888–899.CrossRefGoogle Scholar
McKeown, Thomas (1976) The Modern Rise of Population. London: Academic Press.Google Scholar
Miyazawa, Kazutoshi (2006) Growth and inequality: a demographic explanation. Journal of Population Economics 19, 559–578.Google Scholar
Nishimura, Yukihiro, Pestieau, Pierre and Ponthiere, Gregory (2015) Education choices, longevity and optimal policy in a Ben-Porath economy. PSE Discussion Papers 2015–40.Google Scholar
Pestieau, Pierre, Ponthiere, Gregory and Sato, Motohiro (2008) Longevity, health spending and Pay-As-You-Go pensions. FinanzArchiv - Public Finance Analysis 64, 1–18.Google Scholar
Pestieau, Pierre and Racinero, Maria (2015) Harsh occupations, life expectancy and social security. Mimeo.Google Scholar
Ponthiere, Gregory (2009) Rectangularization and the rise in limit longevity in a simple OLG model. Manchester School 77, 17–46.CrossRefGoogle Scholar
Samuelson, Paul (1975) The optimum growth rate for population. International Economic Review 16, 531–538.CrossRefGoogle Scholar
Sen, Amartya (1998) Mortality as an indicator of economic success and failure. Economic Journal 108, 1–25.Google Scholar
Slovic, Paul (2001) Cigarette smokers: rational actors or rational fools? In Slovic, Paul (ed.), Smoking: Risk, Perception, and Policy, pp. 97–126. Thousand Oaks, CA: Sage.Google Scholar
Tabata, Ken (2014) Population aging and growth: the effect of PAYG pension reform, unpublished.Google Scholar
U.S. Department of Health and Human Services (2014) Health, United States, 2013. Centers for Disease Control and Prevention and National Center for Health Statistics. DHHS Publication 2014–1232.Google Scholar
van Raalte, Alyson, Martikainen, Pekka and Myrskylä, Mikko (2012) Lifespan variation by occupational class: Compression or stagnation over time? Max Planck Institute for Demographic Research Working Paper, 2012–010.Google Scholar
Yaari, Menahem (1965) Uncertain lifetime, life insurance and the theory of the consumer. Review of Economic Studies 32, 137–150CrossRefGoogle Scholar
Zhang, Jie, Zhang, Junsen and Lee, Ronald (2001) Mortality decline and long-run economic growth. Journal of Public Economics 80, 485–507.CrossRefGoogle Scholar
Zhang, Jie, Zhang, Junsen and Lee, Ronald (2003) Rising longevity, education, savings, and growth. Journal of Development Economics 70, 83–101.CrossRefGoogle Scholar