Vintage Human Capital, Demographic Trends, and Endogenous Growth

Boucekkine, Raouf; Croix, David de la; Licandro, Omar

doi:10.1006/jeth.2001.2854

Cited by 386 publications

(415 citation statements)

References 23 publications

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“…Address: ENS, boulevard Jourdan, 48, building B, 75014 Paris, France. Contact: gregory.ponthiere@ens.fr Boucekkine et al (2002). The latter model shows that a higher life expectancy raises the human capital stock through a rise in the number of persons, and favours investment in schooling through a horizon e¤ect, but leads also to the ageing of the stock of human capital, so that the relation between longevity and human capital is non-monotone.…”

Section: Introductionmentioning

confidence: 99%

Existence and stability of overconsumption equilibria

Ponthière

2011

Economic Modelling

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Growth models with endogenous mortality assume generally that life expectancy is increasing with output per capita and, thus, with individual consumption, whatever its level is. However, empirical evidence supports a U-shaped relationship between consumption and mortality, implying that the monotonicity of that relation is local but not global. This paper develops a two-period OLG model where life expectancy is a non-monotone function of consumption, and where agents form myopic anticipations about life expectancy. The existence, uniqueness and stability of steady-state equilibria are studied. It is shown that overconsumption equilibria -i.e. equilibria at which consumption exceeds the level maximizing life expectancy -exist in highly productive economies with a low impatience. We identify also conditions under which there exist long-run cycles in output and longevity around overconsumption equilibria.

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Section: Introductionmentioning

confidence: 99%

Existence and stability of overconsumption equilibria

Ponthière

2011

Economic Modelling

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“…Following Lucas (1988), we assume that the purposeful accumulation of human capital forms the core mechanism leading to economic growth. More specifically, like Bils and Klenow (2000), Kalemli-Ozcan et al (2000), de la Croix and Licandro (1999), and Boucekkine et al (2002), we assume that individual agents accumulate human capital by engaging in full-time educational activities at the start of life. The start-up education period is chosen optimally by each individual and labour market entry is assumed to be irreversible.…”

Section: Introductionmentioning

confidence: 99%

“…In this paper, we follow the macroeconomic literature by assuming that the birth rate and the mortality process are exogenous. 2 Other papers including an age-dependent mortality process include Boucekkine et al (2002), Faruqee (2003), and d 'Albis (2007). Boucekkine et al (2002) is discussed throughout this paper.…”

Section: Introductionmentioning

confidence: 99%

“…2 Other papers including an age-dependent mortality process include Boucekkine et al (2002), Faruqee (2003), and d 'Albis (2007). Boucekkine et al (2002) is discussed throughout this paper. Faruqee's (2003) analysis is flawed because he confuses the cumulative density function with the mortality rate.…”

Section: Introductionmentioning

confidence: 99%

“…In contrast, Bils and Klenow (2000) set 0 < φ < 1, and thus assume that the externality is operative but subject to diminishing returns. Finally, de la Croix and Licandro (1999), Boucekkine et al (2002), Echevarría (2004), and Echevarría and Iza (2006) consider the knife-edge case with φ = 1. In our theoretical model, we generalize the existing literature by allowing the spillover parameter to take on any value between zero and unity (0 ≤ φ ≤ 1).…”

Section: Introductionmentioning

confidence: 99%

See 2 more Smart Citations

Human capital formation and macroeconomic performance in an ageing small open economy

Heijdra

Romp

2009

Journal of Economic Dynamics and Control

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We study the effects of stylized demographic and fiscal shocks on the macroeconomic performance of an industrialized small open economy. We construct an overlappinggenerations model which incorporates a realistic description of the mortality process. Agents engage in educational activities at the start of life and thus create human capital to be used later on in life for production purposes. Simple and intuitive expressions are derived which demonstrate the key economic and demographic mechanisms that are operating in the model. The engine of growth during the demographic transition is an intergenerational externality in the production of human capital. In a calibrated version of our model, we find that the effects of increased longevity on human capital formation are small whereas the reduction in fertility has a rather strong effect. JEL codes: E10, D91, O40, F41, J11.

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The role of age‐structured education data for economic growth forecasts

Cuaresma

Mishra

2011

Journal of Forecasting

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This paper utilizes for the fi rst time age-structured human capital data for economic growth forecasting. We concentrate on pooled cross-country data of 65 countries over six 5-year periods (1970-2000) and consider specifi cations chosen by model selection criteria, Bayesian model averaging methodologies based on in-sample and out-of-sample goodness of fi t and on adaptive regression by mixing. The results indicate that forecast averaging and exploiting the demographic dimension of education data improve economic growth forecasts systematically. In particular, the results are very promising for improving economic growth predictions in developing countries. Copyright parameter uncertainty, and suggest exploiting the correlations between age structure and GDP growth in the framework of demography-based models for long-run predictions. Owing to their relative stability, demography-based forecasts of GDP have caught the attention of forecasters recently. In line with the research of Lindh and Malmberg (2007), Bloom et al. (2007), for instance, examine whether age structure improves forecasts of economic growth. The authors fi nd that including a simple variable summarizing the age structure improves income growth forecasts. While the size and differential dynamics of each age group for a country are commonly interpreted in this literature as a gross indicator of aggregate productivity effects, no study hitherto, to the knowledge of the authors, explicitly considers differential effects of human capital (in the form of education) across age groups.Indeed, the importance of human capital on economic growth has been highlighted systematically in the theoretical literature on the determinants of long-run income growth. However, the empirical evidence of the impact of human capital on economic growth has yielded ambiguous results (see, for instance, Benhabib and Spiegel, 1994;Pritchett, 2001;Krueger and Lindahl, 2001). Data quality has been deemed at least partly responsible for the lack of a signifi cant positive correlation between GDP per capita growth and human capital variables (see De la Fuente and Domenech, 2006;Cohen and Soto, 2007). Recently, a new database has been developed which for the fi rst time summarizes educational attainment fi gures in different age groups (IIASA-VID dataset; see Lutz et al., 2007Lutz et al., , 2008. 1 While the relative size of age groups can contain information which is useful for economic growth forecasts, age-structured human capital information, by disentangling 'quantity' and 'quality' effects, can lead to further improvements. 2 An important reason illustrating the possible performance differential is that while age structure demographic information can be argued to render level effects on GDP per capita, age-structured human capital may induce both level and growth effects (through its effect on technology adoption; see Spiegel, 1994, 2005) on the latter. Age-structured human capital introduces the role of fi rst, demographic change (age-structured population change and i...

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Vintage Human Capital, Demographic Trends, and Endogenous Growth

Cited by 386 publications

References 23 publications

Existence and stability of overconsumption equilibria

Existence and stability of overconsumption equilibria

Human capital formation and macroeconomic performance in an ageing small open economy

The role of age‐structured education data for economic growth forecasts

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