Life Expectancy and the Environment

35 Pages Posted: 17 Nov 2009

See all articles by Fabio Mariani

Fabio Mariani

IZA Institute of Labor Economics

Agustin Perez Barahona

Catholic University of Louvain (UCL) - Center for Operations Research and Econometrics (CORE)

Natacha Raffin

Paris School of Economics (PSE)

Abstract

We present an OLG model in which life expectancy and environmental quality dynamics are jointly determined. Agents may invest in environmental care, depending on how much they expect to live. In turn, environmental conditions affect life expectancy. As a result, our model produces a positive correlation between longevity and environmental quality, both in the long-run and along the transition path. Eventually, multiple equilibria may also arise: some countries might be caught in a low-life-expectancy/low-environmental-quality trap. This outcome is consistent with stylized facts relating life expectancy and environmental performance measures. We also discuss the welfare and policy implications of the intergenerational externalities generated by individual choices. Finally, we show that our results are robust to the introduction of growth dynamics based on physical or human capital accumulation.

Keywords: environmental quality, life expectancy, poverty traps, human capital

JEL Classification: J24, O11, O40, Q56

Suggested Citation

Mariani, Fabio and Perez Barahona, Agustin and Raffin, Natacha, Life Expectancy and the Environment. IZA Discussion Paper No. 4564. Available at SSRN: https://ssrn.com/abstract=1506316

Fabio Mariani (Contact Author)

IZA Institute of Labor Economics ( email )

P.O. Box 7240
Bonn, D-53072
Germany

Agustin Perez Barahona

Catholic University of Louvain (UCL) - Center for Operations Research and Econometrics (CORE) ( email )

34 Voie du Roman Pays
B-1348 Louvain-la-Neuve, b-1348
Belgium

Natacha Raffin

Paris School of Economics (PSE) ( email )

48 Boulevard Jourdan
Paris, 75014 75014
France

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