@TechReport{dp-497,
  author        = {Strulik, Holger and Werner, Katharina},
  astring       = {Holger Strulik and Katharina Werner},
  title         = {Life Expectancy, Labor Supply, and Long-Run Growth:
                  Reconciling Theory and Evidence},
  month         = {March},
  year          = {2012},
  pages         = {33},
  size          = {433},
  number        = {497},
  language      = {en},
  keywords      = {longevity, active life expectancy, education, hours
                  worked, economic growth},
  jelclass      = {E20, I25, J22, O10, O40},
  abstract      = {We set up a three-period overlapping generation model in
                  which young individuals allocate their time to schooling
                  and work, healthy middle aged individuals allocate their
                  time to leisure and work and their income to consumption
                  and savings for retirement, and old age individuals live
                  off their savings. The three period setup allows us to
                  distinguish between longevity and active life expectancy
                  (i.e. the expected length of period 1 and 2). We show that
                  individuals optimally respond to a longer active life by
                  educating more and, if the labor supply elasticity is high
                  enough, by supplying less labor. We calibrate the model to
                  US data and show that the historical evolution of
                  increasing education and declining labor supply can be
                  explained as an optimal response to increasing active life
                  expectancy. We integrate the theory into a unified growth
                  model and reestablish increasing life expectancy as an
                  engine of long-run economic development.}
}