Probabilistic aging

The paper develops an overlapping generations model with probabilistic aging of households. We define age as a set of personal attributes such as earnings potential, health and tastes that are characteristic of a person's position in the life-cycle. In assuming a limited number of different states of age, we separate the concepts of age and time since birth. Agents may retain their age characteristics for several periods before they move with a given probability to another state of age. Different generations that share the same age characteristics are aggregated analytically to a low number of age groups. The probabilistic aging model thus allows for a very parsimonious yet rather close approximation of demographic structure and life-cycle differences in earnings, wealth and consumption. Existing classes of overlapping generations models follow as special cases.

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Year of publication:	2006
Authors:	Grafenhofer, Dominik ; Jaag, Christian ; Keuschnigg, Christian ; Keuschnigg, Mirela
Publisher:	Munich : Center for Economic Studies and Ifo Institute (CESifo)
Subject:	Overlapping Generations \| Alternde Bevölkerung \| Bevölkerungsentwicklung \| Lebenseinkommen \| Theorie \| overlapping generations \| aging \| demographics \| life-cycle earnings

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Series:	CESifo Working Paper ; 1680
Type of publication:	Book / Working Paper
Type of publication (narrower categories):	Working Paper
Language:	English
Other identifiers:	510027466 [GVK] hdl:10419/19144 [Handle]
Classification:	J21 - Labor Force and Employment, Size, and Structure ; H55 - Social Security and Public Pensions ; D91 - Intertemporal Consumer Choice; Life Cycle Models and Saving ; D58 - Computable and Other Applied General Equilibrium Models
Source:	EconStor

Persistent link: https://www.econbiz.de/10010261425