The genesis of the golden age: Accounting for the rise in health and leisure

Carl Johan Dalgaard; Holger Strulik

doi:10.1016/j.red.2017.01.005

The genesis of the golden age: Accounting for the rise in health and leisure

Carl Johan Dalgaard, Holger Strulik^*

^*Corresponding author af dette arbejde

17 Citationer (Scopus)

Abstract

We develop a life cycle model featuring an optimal retirement decision in the presence of physiological aging. In modeling the aging process we draw on recent advances within the fields of biology and medicine. In the model individuals decide on optimal consumption during life, the age of retirement, and (via health investments) the timing of their death. Accordingly, “years in retirement” is fully endogenously determined. Using the model we can account for the evolution of age of retirement and longevity across cohorts born between 1850 and 1940 in the US. Our analysis indicates that 2/3 of the observed increase in longevity can be accounted for by wage growth, whereas the driver behind the observed rising age of retirement appears to have been technological change in health care. Both technology and income contribute to the rise in years in retirement, but the contribution from income is slightly greater.

Originalsprog	Engelsk
Tidsskrift	Review of Economic Dynamics
Vol/bind	24
Sider (fra-til)	132-151
Antal sider	20
ISSN	1094-2025
DOI	https://doi.org/10.1016/j.red.2017.01.005
Status	Udgivet - 1 mar. 2017

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10.1016/j.red.2017.01.005

Citationsformater

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title = "The genesis of the golden age: Accounting for the rise in health and leisure",

abstract = "We develop a life cycle model featuring an optimal retirement decision in the presence of physiological aging. In modeling the aging process we draw on recent advances within the fields of biology and medicine. In the model individuals decide on optimal consumption during life, the age of retirement, and (via health investments) the timing of their death. Accordingly, “years in retirement” is fully endogenously determined. Using the model we can account for the evolution of age of retirement and longevity across cohorts born between 1850 and 1940 in the US. Our analysis indicates that 2/3 of the observed increase in longevity can be accounted for by wage growth, whereas the driver behind the observed rising age of retirement appears to have been technological change in health care. Both technology and income contribute to the rise in years in retirement, but the contribution from income is slightly greater.",

keywords = "Aging, Health, Health technology, Longevity, Retirement, D91, I15, J17, J26",

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TY - JOUR

T1 - The genesis of the golden age

T2 - Accounting for the rise in health and leisure

AU - Dalgaard, Carl Johan

AU - Strulik, Holger

PY - 2017/3/1

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N2 - We develop a life cycle model featuring an optimal retirement decision in the presence of physiological aging. In modeling the aging process we draw on recent advances within the fields of biology and medicine. In the model individuals decide on optimal consumption during life, the age of retirement, and (via health investments) the timing of their death. Accordingly, “years in retirement” is fully endogenously determined. Using the model we can account for the evolution of age of retirement and longevity across cohorts born between 1850 and 1940 in the US. Our analysis indicates that 2/3 of the observed increase in longevity can be accounted for by wage growth, whereas the driver behind the observed rising age of retirement appears to have been technological change in health care. Both technology and income contribute to the rise in years in retirement, but the contribution from income is slightly greater.

AB - We develop a life cycle model featuring an optimal retirement decision in the presence of physiological aging. In modeling the aging process we draw on recent advances within the fields of biology and medicine. In the model individuals decide on optimal consumption during life, the age of retirement, and (via health investments) the timing of their death. Accordingly, “years in retirement” is fully endogenously determined. Using the model we can account for the evolution of age of retirement and longevity across cohorts born between 1850 and 1940 in the US. Our analysis indicates that 2/3 of the observed increase in longevity can be accounted for by wage growth, whereas the driver behind the observed rising age of retirement appears to have been technological change in health care. Both technology and income contribute to the rise in years in retirement, but the contribution from income is slightly greater.

KW - Aging

KW - Health

KW - Health technology

KW - Longevity

KW - Retirement

KW - D91

KW - I15

KW - J17

KW - J26

U2 - 10.1016/j.red.2017.01.005

DO - 10.1016/j.red.2017.01.005

M3 - Journal article

AN - SCOPUS:85012079850

SN - 1094-2025

VL - 24

SP - 132

EP - 151

JO - Review of Economic Dynamics

JF - Review of Economic Dynamics

ER -

The genesis of the golden age: Accounting for the rise in health and leisure

Abstract

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