Pollution and Growth: The Role of Pension on the Efficiency of Health and Environmental Policies

Armel Ngami and Thomas Seegmuller

No 1815, AMSE Working Papers from Aix-Marseille School of Economics, France

Abstract: This paper analyses the effect of a pay-as-you-go pension system on the evolution of capital and pollution, and on the efficiency of an environmental versus health policy. In an overlapping generations model (OLG), we introduce endogenous longevity that depends on pollution and health expenditures. Global dynamics may display multiple balanced growth paths (BGP). We show that by discouraging savings, a policy that promotes the pension system enlarges the environmental poverty trap. More surprisingly, the environmental policy has contrasted effects according to the significance of the pension system. If it has a low size, a raise of the environmental policy enlarges the environmental poverty trap and leads to a rise in capital over pollution at the highest stationary equilibrium. In contrast, in economies where intergenerational solidarity is well developed, capital over pollution decreases at the highest BGP. In such a case, the environmental policy does not necessarily lead to a better longevity and growth.

Keywords: longevity; environment; Health; pension system; growth; Pollution (search for similar items in EconPapers)
Pages: 27 pages
Date: 2018-05
New Economics Papers: this item is included in nep-age, nep-dge, nep-env and nep-hea
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Related works:
Journal Article: Pollution and growth: The role of pension in the efficiency of health and environmental policies (2021)
Working Paper: Pollution and growth: The role of pension in the efficiency of health and environmental policies (2021)
Working Paper: Pollution and Growth: The Role of Pension on the Efficiency of Health and Environmental Policies (2018)
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Persistent link: https://EconPapers.repec.org/RePEc:aim:wpaimx:1815

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