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Journal of Population Economics

, Volume 23, Issue 2, pp 703–735 | Cite as

Mortality, fertility, education and capital accumulation in a simple OLG economy

  • Alexander LudwigEmail author
  • Edgar Vogel
Original Paper

Abstract

We develop a simple OLG model to analytically show that aging leads to increased educational efforts through a general equilibrium effect. The mechanism is that scarcity of raw labor increases the return of human relative to physical capital. While a reduction in the birth rate is shown to unambiguously increase educational efforts, increases in the survival rate have ambiguous effects. Falling birth rates also increase capital per worker, but the effects of rising survival rates are again ambiguous. We conclude that our model is a useful laboratory to highlight potentially offsetting effects in models with endogenous education and overlapping generations.

Keywords

Aging Education Overlapping generations 

JEL Classification

J11 J24 O11 

Notes

Acknowledgements

We thank Wolfgang Kuhle, Thomas Schelkle, and two anonymous referees for helpful comments. Financial support by the State of Baden-Württemberg and the German Insurers Association (GDV) is gratefully acknowledged.

Supplementary material

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Copyright information

© Springer-Verlag 2009

Authors and Affiliations

  1. 1.Mannheim Research Institute for the Economics of Aging (MEA)University of MannheimMannheimGermany

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