Probabilistic Aging
Type
discussion paper
Date Issued
2007-01-15
Author(s)
Abstract
The paper develops an overlapping generations model with probabilistic aging of households. We define age as a set of personal attributes such as earnings potential, health and tastes that are characteristic of a person's position in the life-cycle. In assuming a limited number of different states of age, we separate the concepts of age and time since birth. Agents may retain their age characteristics for several periods before they move with a given probability to another state of age. Different generations that share the same age characteristics are aggregated analytically to a low number of age groups. The probabilistic aging model thus allows for a very parsimonious yet rather accurate approximation of demographic change and of life-cycle differences in earnings, wealth and consumption. Existing classes of overlapping generations models follow as special cases.
Funding(s)
Language
English
Keywords
Overlapping generations
aging
demographics
life-cycle earnings
HSG Classification
contribution to scientific community
Refereed
No
Publisher
Volkswirtschaftliche Abteilung, Universität St. Gallen, CESifo WP No. 1680
Start page
1
End page
36
Pages
36
Subject(s)
Eprints ID
16435
File(s)![Thumbnail Image]()
open.access
Name
PAModel.pdf
Size
366.99 KB
Format
Adobe PDF
Checksum (MD5)
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