Optimal Aging and Cognitive Ability: Understanding the Education Gradient
Holger Strulik, Leibnitz University of Hannover, Germany
Date: Thu, 22 November 2011 , Time: 14:00 - 15:00
This study investigates optimal education, health expenditure, and unhealthy behavior of individuals constrained by aging bodies. The aging process, i.e. the accumulation of health deficits over time, is built on recent insights from gerontology. The loss of body functionality, which eventually leads to death, can be accelerated by unhealthy behavior and delayed through health expenditure. The model rationalizes why less well educated people optimally spend less on health and indulge more in unhealthy behavior. The model is numerically calibrated for the average male US citizen. In the benchmark case a difference of the skill premium (cognitive ability) that motivates one year more of education motivates also about 8 percent less unhealthy behavior and 5 percent more health expenditure and thus explains about half a year gain of longevity. Progress in medical technology can explain why the education gradient gets larger over time.
About the presenter
Details about the presenter are accessible at http://kaldor.vwl.uni-hannover.de/holger/.