Harsh occupations, life expectancy and social security

Pierre Pestieau and Maria Racionero

No 678, CEPR Discussion Papers from Centre for Economic Policy Research, Research School of Economics, Australian National University

Abstract: Should special pension provisions be offered to workers in harsh occupations? We address this question in an optimal tax setting where individuals differ in longevity and occupation. Longevity is private information but workers in harsh occupations have on average shorter lifes than workers in safe occupations. We adopt a weighted utilitarian social objective to partially redress the implicit redistribution from short- to long-lived individuals that the unweighted utilitarian objective entails. We show that there is a case for differentiating the social security policy by occupation. We also show that short-lived workers are induced to overconsume when young and to retire early in order to prevent mimicking by long-lived ones. This is achieved by taxing, often quite heavily, the savings and the earnings from prolonging activity of short-lived individuals.

Keywords: longevity; retirement; harsh occcupations; tagging (search for similar items in EconPapers)
JEL-codes: H21 H55 (search for similar items in EconPapers)
Date: 2013-01
New Economics Papers: this item is included in nep-age, nep-cta, nep-hea and nep-lab
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Citations: View citations in EconPapers (13)

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Related works:
Journal Article: Harsh occupations, life expectancy and social security (2016)
Working Paper: Harsh Occupations, Life expectancy and Social Security (2016)
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Persistent link: https://EconPapers.repec.org/RePEc:auu:dpaper:678

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