Social Security Incentives, Human Capital Investment and Mobility of Labor

Panu Poutvaara

No 1729, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: Migration between countries with earnings-related and flat-rate pay-as-you-go social security systems may change human capital investments in both countries. The possibility of emigration boosts investments in human capital in the country with flat-rate benefits. Correspondingly, those expecting to migrate from the country with earnings-related benefits to a country with flat-rate benefits may reduce their investment in education. With suitably planned transfers between the two countries, allowing for migration may generate a Pareto-improvement for all current and future generations. Without transfers, either country may be unable to pay for promised benefits when labor becomes mobile.

Keywords: earnings-related and flat-rate pensions; migration; social security; education (search for similar items in EconPapers)
JEL-codes: F22 H55 I2 (search for similar items in EconPapers)
Pages: 18 pages
Date: 2005-08
New Economics Papers: this item is included in nep-edu, nep-lab, nep-pbe and nep-pub
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Citations: View citations in EconPapers (11)

Published - published in: Journal of Public Economics, 2007, 91 (7-8), 1299-1325

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Related works:
Journal Article: Social security incentives, human capital investment and mobility of labor (2007)
Working Paper: Social security incentives, human capital investment and mobility of labor (2007)
Working Paper: Social Security Incentives, Human Capital Investment and Mobility of Labor (2005)
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