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Pan Liu
''Life expectancy, schooling and lifetime labor supply: the Ben-Porath mechanism revisited''
( 2015, Vol. 35 No.1 )
Hansen and Lønstrup [Journal of Population Economics, 2012] construct a three-period, life-cycle model to study the famed Ben-Porath mechanism and attempt to reconcile it with the empirical findings in Hazan [Econometrica, 2009]: increased life expectancy has a positive effect on schooling but a negative effect on expected lifetime labor supply. This paper shows that within the framework of Hansen and Lønstrup (2012), as life expectancy increases, expected lifetime labor supply may not decline even when labor supplies at the two end stages of life do. I fully characterize the conditions under which the model in Hansen and Lønstrup (2012) can produce the empirical findings in Hazan (2009).
Keywords: Life expectancy, schooling, lifetime labor supply, Ben-Porath model
JEL: E2 - Macroeconomics: Consumption, Saving, Production, Employment, and Investment: General (includes Measurement and Data)
O1 - Economic Development: General
Manuscript Received : Oct 05 2014 Manuscript Accepted : Mar 11 2015

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