A new paper published ONLINE FIRST freely accessible shows that an increase in life expectancy raises the level as well as the inequality of income.
Aging and automation in economies with search frictions
by Xiaomeng Zhang, Theodore Palivos & Xiangbo Liu
Published ONLINE FIRST 2021: Journal of Population Economics
FREE READLINK: https://rdcu.be/coNTX
Author Abstract: This paper investigates the impact of an increase in life expectancy on the level and the distribution of income in the presence of skill heterogeneity and automation. It shows analytically that an increase in life expectancy induces the replacement of low-skilled workers by automation capital and high-skilled workers. Moreover, it raises the skill premium and has an ambiguous effect on total income. A simulation exercise, based on US data, shows that an increase in life expectancy raises the level as well as the inequality of income. We consider redistributive policies that can mitigate some of the adverse effects of an increase in life expectancy for low-skilled workers.
Journal of Population Economics
Access to the recently published Volume 34, Issue 3, July 2021.
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