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Unequal longevities and lifestyles transmission

Author

Listed:
  • Grégory Ponthière

    (PSE - Paris School of Economics - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris Sciences et Lettres - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement, PJSE - Paris-Jourdan Sciences Economiques - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris Sciences et Lettres - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique)

Abstract
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.

Suggested Citation

  • Grégory Ponthière, 2008. "Unequal longevities and lifestyles transmission," PSE Working Papers halshs-00586010, HAL.
    • Handle: RePEc:hal:psewpa:halshs-00586010
    Note: View the original document on HAL open archive server: https://shs.hal.science/halshs-00586010
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    References listed on IDEAS

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    1. Tomas J. Philipson & Gary S. Becker, 1998. "Old-Age Longevity and Mortality-Contingent Claims," Journal of Political Economy, University of Chicago Press, vol. 106(3), pages 551-573, June.
    2. Marie-Louise Leroux & Pierre Pestieau & Grégory Ponthière, 2008. "Should we subsidize longevity?," Working Papers halshs-00586236, HAL.
    3. Pierre Pestieau & Gregory Ponthiere & Motohiro Sato, 2008. "Longevity, Health Spending, and Pay-as-you-Go Pensions," FinanzArchiv: Public Finance Analysis, Mohr Siebeck, Tübingen, vol. 64(1), pages 1-18, March.
    4. Chakraborty, Shankha, 2004. "Endogenous lifetime and economic growth," Journal of Economic Theory, Elsevier, vol. 116(1), pages 119-137, May.
    5. Bisin, Alberto & Verdier, Thierry, 2001. "The Economics of Cultural Transmission and the Dynamics of Preferences," Journal of Economic Theory, Elsevier, vol. 97(2), pages 298-319, April.
    6. Jie Zhang & Junsen Zhang & Michael C.M. Leung, 2006. "Health investment, saving, and public policy," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 39(1), pages 68-93, February.
    7. EECKHOUDT, Louis & PESTIEAU, Pierre, 2007. "Fear of ruin and longevity enhancing investment," LIDAM Discussion Papers CORE 2007032, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
    Full references (including those not matched with items on IDEAS)

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    Cited by:

    1. Gregory Ponthiere, 2011. "Mortality, Family and Lifestyles," Journal of Family and Economic Issues, Springer, vol. 32(2), pages 175-190, June.
    2. Ponthiere, Gregory, 2011. "Existence and stability of overconsumption equilibria," Economic Modelling, Elsevier, vol. 28(1), pages 74-90.
    3. Laura Leker & Gregory Ponthiere, 2015. "Education, life expectancy and family bargaining: the Ben-Porath effect revisited," Education Economics, Taylor & Francis Journals, vol. 23(4), pages 481-513, August.
    4. Ponthiere, Gregory & Thibault, Emmanuel, 2023. "Life Expectancy, Income and Long-Term Care: The Preston Curve Reexamined," GLO Discussion Paper Series 1335, Global Labor Organization (GLO).
    5. Pierre Pestieau & Gregory Ponthiere, 2012. "Myopia, regrets, and risky behaviors," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 19(2), pages 288-317, April.
    6. Pierre Pestieau & Gregory Ponthiere, 2012. "The Public Economics of Increasing Longevity," Hacienda Pública Española / Review of Public Economics, IEF, vol. 200(1), pages 41-74, March.
    7. Marie-Louise Leroux & Pierre Pestieau & Gregory Ponthiere, 2011. "Optimal linear taxation under endogenous longevity," Journal of Population Economics, Springer;European Society for Population Economics, vol. 24(1), pages 213-237, January.
    8. Ponthiere Gregory, 2013. "Long-Term Care, Altruism and Socialization," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 14(2), pages 429-471, October.
    9. Ponthiere, Gregory, 2013. "Rationalizability and interactivity in evolutionary OLG models," Mathematical Social Sciences, Elsevier, vol. 66(2), pages 105-116.
    10. Alberto Bisin & Thierry Verdier, 2010. "The Economics of Cultural Transmission and Socialization," Post-Print halshs-00754788, HAL.
    11. Javier Olivera, 2013. "Old-age Support and Demographic Transition in Developing Countries. A Cultural Transmission Model," Working Papers 201307, Geary Institute, University College Dublin.

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    Keywords

    longevity; OLG model; lifestyle; socialization; intergenerational externalities; Pigouvian taxes; longévité; modèle OLG; mode de vie; socialisation; externalités intergénérationnelles; taxes pigouviennes;
    All these keywords.

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