Life Expectancy and Income Convergence in the World: A Dynamic General Equilibrium Analysis

June 1, 2008

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Format: Chicago

Kenichi Ueda. Life Expectancy and Income Convergence in the World: A Dynamic General Equilibrium Analysis, (USA: International Monetary Fund, 2008) accessed December 26, 2024

Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary

There is world-wide convergence in life expectancy, despite little convergence in GDP per capita. If one values longer life much more than material happiness, the world living standards may this have already converged substantially. This paper introduces the concept of the dynastic general equilibrium value of life to measure welfare gains from the increase in life expectancy. A calibration study finds sizable welfare gains, but these gains hardly mitigate the large inequality among countries. A conventional GDP-based measure remains a good approximation for (non) convergence in world living standards, even when adjusted for changes in life expectancy.

Subject: Consumption, Health, Human capital, Income, Insurance

Keywords: Depreciation rate, Law of motion, Life expectancy, Physical capital, WP

Publication Details

Pages:

34
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 2008/158
Stock No:

WPIEA2008158
ISBN:

9781451870169
ISSN:

1018-5941

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