Carnegie Mellon University
Tepper School of Business
5000 Forbes Ave.
Pittsburgh, PA 15213
Institutional Affiliation: Carnegie Mellon University
Information about this author at RePEc
NBER Working Papers and Publications
|January 2019||The Costs and Benefits of Caring: Aggregate Burdens of an Aging Population|
with Finn Kydland: w25498
Throughout the 21st century, population aging in the United States will lead to increases in the number of elderly people requiring some form of living assistance which, as some argue, is to be seen as a burden on society, straining old-age insurance systems and requiring younger agents to devote an increasing fraction of their time toward caring for infirm elders. Given this concern, it is natural to ask how aggregate GDP growth is affected by such a phenomenon. We develop an overlapping generations model where young agents face idiosyncratic risk of contracting an old-age disease, like for example Alzheimer's or dementia, which adversely affects their ability to fully enjoy consumption. Young agents care about their infirm elders and can choose to supplement elder welfare by spending tim...