A Dynastic Perspective on the Value of Life with Endogenous Fertility

Speaker: A/Prof Youngsoo Jang

Affiliation: Yonsei University

Location: Room 207, Chamberlain Building (#35), St Lucia Campus

Zoom: https://uqz.zoom.us/j/82603079317

Abstract: We study the value of statistical life (VSL) in a dynastic framework in which parents optimally choose fertility and invest in their children. Departing from standard life‐cycle models, we define a dynastic VSL that reflects not only the shadow value of own survival and consumption but also the value of descendants. In this setting, improvements in longevity can raise or lower the value of life, depending on how survival changes fertility, human-capital investment, and intergenerational transfers. We embed these mechanisms into a quantitative heterogeneous-agent model with intergenerational ability transmission, human-capital production, and age-specific mortality risk. The calibrated model shows that VSL depends not only on medical and income factors but also on family structure and education technology, and that demographic transitions can meaningfully reshape both individual and dynastic valuations of life.