Occupational risks, social insurance and investments in education

Dan Anderberg

Journal of Population Economics, 2000, vol. 13, issue 3, 425-441

Abstract: A link between social insurance and education policy is explored. Due to moral hazard full insurance against disability is not feasible. When high- and low-risk individuals can be identified second-best social insurance system entails cross-subsidies from the low-risk group to the high-risk group. Implementation of this second-best insurance however distorts the human capital investment decisions when education qualifies for a low risk job. Therefore, the second-best social insurance together with an education subsidy is a welfare improving policy. An education policy also has the role of establishing dynamic consistency of the government's policy.

Keywords: Disability; pensions; ·; time; consistency; ·; education; policy (search for similar items in EconPapers)
JEL-codes: H21 H42 I28 (search for similar items in EconPapers)
Date: 2000-09-11
Note: Received: 16 October 1998/Accepted: 8 September 1999
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