Public and Private Expenditures on Health in a GrowthModel

This paper introduces endogenous longevity risk in an otherwisestandard overlapping generations model with capital. In the model, an agent mayincrease the length of her old age by incurring investments in her own health fundedfrom her wage income. Such private health investments are more “productive” ifaccompanied by complementary tax-financed public health programs. The public inputin private longevity is socially desirable; yet its presence may expose the economy toaggregate chaotic fluctuations.[...]