Incorporating changes in life expectancy into economic growth rates: an application to Belgium, 1867-1997

Longevity-adjusted growth rates are computed for Belgium over the period 1867-1997, by using a method based on contributions by Usher (1973a, 1980), Williamson (1984) and Miller (2000). Adjusted growth rates substantially differ from conventional figures, which may have tended to underestimate actual well-being improvements, especially during the second half of the 20th century. The analysis of the size of the adjustments, size which varies across periods, reveals that the post-1974 growth slowdown might have been less severe, in terms of social well-being, than suggested by usual measures. Our results, being robust to the introduction of some degree of endogeneity of longevity, seem to avoid the double-counting criticism. Several shortcomings of our method are discussed and some directions are proposed for future research. It is concluded that, thanks to their richer informational basis, longevity-adjusted growth rates constitute promising indicators to complement usual growth measures in the study of social well-being evolution over time.

Utilitarian population ethics: a survey

This essay is a survey of utilitarian criteria aimed at guiding what Parfit (1984) called Different Number Choices (i.e. choices affecting both people’s number and identities). The emphasis is laid on two aspects of those criteria: their ethical foundations and their implications. Our analysis starts with total, average and critical-level utilitarianisms, against which numerous criticisms, such as Parfit’s Repugnant Conclusion and Mere Addition Paradox, were formulated, so that alternative social welfare criteria, as the ones developed by Hurka (1983) and Ng (1986), might seem appealing. However, those criteria are not fully satisfactory, and, as most criteria considered here, they do not stand up to Naverson’s (1967) critique, according to which social welfare cannot be increased or reduced if no existing person is affected. The difficulties resulting from taking Naverson’s critique into account – and thus from considering the Actual Problem rather than the Genesis Problem – are then discussed. It is concluded that utilitarian population ethics might reach an impasse, which might be regarded either as resulting from contradicting intuitions, or as an illustration of utilitarianism’s own limits. But those limits would be faced by any other consequences-based ethical theory in front of Different Number Choices.

Should we discount future generations’ welfare? A survey on the “pure” discount rate debate.

In A Mathematical Theory of Saving (1928), Frank Ramsey not only laid the foundations of the fruitful optimal growth literature, but also launched a major moral debate: should we discount future generations’ well-being? While Ramsey regarded such “pure” discounting as “ethically indefensible”, several philosophers and economists have developed arguments justifying the “pure” discounting practice since the early 1960s. This essay consists of a survey of those arguments. After a brief examination of the – often implicit – treatment of future generations’ welfare by utilitarian thinkers before Ramsey’s view was expressed, later arguments of various kinds are analysed. It is argued that, under the assumption of perfect certainty regarding future human life, the “pure” discounting practice seems ethically untenable. However, once we account for the uncertainty regarding future generations’ existence, “pure” discounting seems more acceptable, even if strong criticisms still remain, especially regarding the adequateness of the expected utility theory in such a normative context. those limits would be faced by any other consequences-based ethical theory in front of Different Number Choices.

Asymptotic age structures and intergenerational trade

While demographers Lotka (1939) and Lopez (1961) proposed conditions on (exogenous) fertility and mortality laws under which populations with distinct initial age structures exhibit the same asymptotic age structure, this paper re-examines the issues of age structure stabilization and convergence, by considering a population whose fertility and mortality are endogenously determined in the economy. For that purpose, we develop a three-period OLG model where human capital accumulation and intergenerational trade affect fertility and longevity. It is shown that the age structure must converge asymptotically towards a stable structure, whose form depends on the structural parameters of the economy. Moreover, populations with distinct initial age structures will end up with the same long-run age structure when fertility and mortality laws are converging, which requires converging terms of trade between coexisting generations in the different populations under study.age structure ; OLG model ; fertility ; mortality ; demographic transition ; intergenerational trade

Unequal longevities and lifestyles transmission

Whereas studies on the optimal taxation under endogenous longevity assume a fixed heterogeneity of lifestyles, this paper considers the optimal tax policy in an economy where unequal longevities are the unintended outcome of differences in lifestyles, and where lifestyles are transmitted across generations. For that purpose, we develop a three-period OLG model where the population, who ignores the negative impact of excessive work on longevity, is partitioned in two groups with different tastes for leisure, and follows an adaptation/imitation process à la Bisin and Verdier (2001). The optimal short-run and long-run Pigouvian taxes on wages are shown to differ, because the latter correct agents'myopia, but also internalize intergenerational externalities due to the socialization process.longevity ; OLG model ; lifestyle ; socialization ; intergenerational externalities ; Pigouvian taxes

Mortality, family and lifestyles

While there is a large empirical literature on the intergenerational transmission of health and survival outcomes in relation to lifestyles, little theoretical work exists on the long-run prevalence of (un)healthy lifestyles induced by mortality patterns. To examine that issue, this paper develops an overlapping generations model where a healthy lifestyle and an unhealthy lifestyle are transmitted vertically or obliquely across generations. It is shown that there must exist a locally stable heterogeneous equilibrium involving a majority of healthy agents, as a result of the larger parental gains from socialization efforts under a higher life expectancy. Wealso examine the robustness of our results to the introduction of parental altruistic concerns for children's health and of asymmetric socialization costs.altruism ; family ; lifestyle ; longevity ; socialization

Existence and stability of overconsumption equilibria

Growth models with endogenous mortality assume generally that life expectancy is increasing with output per capita, and, thus, with individual consumption, whatever the consumption level is. However, empirical evidence on the effect of overconsumption and obesity on mortality tends to question that postulate. This paper develops a two-period OLG model where life expectancy is a non-monotonic function of consumption. The existence, uniqueness and stability of steady-state equilibria are studied. It is shown that overconsumption equilibria - i.e. equilibria at which consumption exceeds the level maximizing life expectancy - exist in highly productive economies with a low impatience. Stability analysis highlights conditions under which there exist non-converging cycles in output and longevity around overconsumption equilibria.longevity ; growth ; overconsumption ; obesity ; OLG model

Childbearing Age, Family Allowances and Social Security

Although the optimal policy under endogenous fertility has been widely studied, the optimal public intervention under endogenous childbearing age has remained largely unexplored. This paper examines the optimal family policy in a context where the number and the timing of births are chosen by individuals who differ as to how early fertility can weaken future earnings growth. We analyze the design of a policy of family allowances and of public pensions in such a setting, under distinct informational environments. We show how endogenous childbearing ages affect the optimalpolicy, through the redistribution across the earnings dimension and the internalization of fertility externalities. It is also shown that, contrary to common practice, children benefits differentiated according to the age of parents can, under some conditions, be part of the optimal family policy.endogenous fertility ; childbearing age ; family benefits

Until Death Do Us Part? The economics of short-term marriage contracts

"Until death do us part". Common wisdom considers that marriages will last forever, as the default length of a marriage is the total remaining lifespan of the spouses. This paper aims at questioning the prevailing marriage contracts, by exploring the conditions under which short-term contracts would be more desirable. Using a two-period collective household model, we show that, under a large interval of values for household production technology parameters and individual preference parameters, short-term marriage contracts, if available, would dominate long-term contracts. Moreover, the recent equalization of bargaining power within the household is shown to make short-term contracts even more desirable than in the past.marriage contracts ; collective household model ; length of marriage ; household production technology

Utilitarian population ethics and births timing

Births postponement is a key demographic trend of the last decades.To examine its social desirability, we study how utilitarian criteria rank histories equal on all dimensions except the age at which individuals give birth to their children. We develop a T-period dynamic overlapping generations economy with a fixed living space, where individual welfare is increasing in the available space per head, and where agents have children in one out of two fertility periods. When comparing finite histories with an equal total number of life-periods, classical, average and critical-level utilitarian criteria select the same fertility timing, i.e. the one leading to the most smoothed population path. When comparing infinite histories with stationary population sizes, utilitarian criteria may select different birth timings, depending on individual utility functions. Those results are compared with the ones obtained when agents value coexistence time with their descendants. Finally, we identify conditions under which a shift from an early births regime to a late birthsregime is socially desirable