Life expectancy and the environment

Résumé

We present an OLG model in which life expectancy and environmental quality dynamics are jointly determined. Agents may invest in environmental quality, depending on how much they expect to live. In turn, environmental conditions affects life expectancy. The model produces multiple steady-states (development regimes) and initial conditions do matter. In particular, some countries may be trapped in a low life expectancy / low environmental quality trap. This outcome is consistent with stylized facts relating life expectancy and environmental performance measures. Possible strategies to escape from this kind of trap are also discussed. Finally, we show that our results are robust to the introduction of human capital dynamics, driven by parentally funded education.

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Codes JEL