Fair Accumulation under Risky Lifetime

Gregory Ponthiere

Working Papers from HAL

Abstract: Individuals save for their old days, but not all of them enjoy the old age. This paper characterizes the optimal capital accumulation in a two-period OLG model where lifetime is risky and varies across individuals. We compare two long-run social optima: (1) the average utilitarian optimum, where steady-state average welfare is maximized; (2) the egalitarian optimum, where the welfare of the worst-o¤ at the steady-state is maximized. It is shown that, under plausible conditions, the egalitarian optimum involves a higher capital and a lower fertility than the utilitarian optimum. Those inequalities hold also in a second-best framework where survival conditions are exogenously linked to the capital level.

Keywords: Egalitarianism; Differentiated Mortality; Optimal Capital Accumulation; Golden Rule; Fertility (search for similar items in EconPapers)
Date: 2012-10
Note: View the original document on HAL open archive server: https://shs.hal.science/halshs-00746913v1
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Related works:
Journal Article: Fair Accumulation under Risky Lifetime (2013)
Working Paper: Fair Accumulation under Risky Lifetime (2013)
Working Paper: Fair Accumulation under Risky Lifetime (2013)
Working Paper: Fair Accumulation under Risky Lifetime (2012)
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