Life Expectancy, Human Capital, Social Security and Growth

Cruz Ángel Echevarría Olave and María Amaya Iza Padilla

No 1988-088X, DFAEII Working Papers from University of the Basque Country - Department of Foundations of Economic Analysis II

Abstract: We analyze the effects of changes in the mortality rate upon life expectancy, education, retirement age, human capital and growth in the presence of social security. We build a vintage growth, overlapping generations model in which individuals choose the time length of education and retirement age, and where unfunded social security pensions depend on workers'past contributions. Social security has a positive effect on education, but pension benefits favor reductions in retirement age. The net effect is that starting from a benchmark case, higher life expectancies give rise to lower growth rates in the presence of social security as the share of active population is reduced. In addition, higher social security contribution rates reduce the growth rate.

Keywords: mortality rate; social security; growth (search for similar items in EconPapers)
Date: 2005
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Citations: View citations in EconPapers (1)

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Dpto. de Fundamentos del Análisis Económico II, = Facultad de CC. Económicas y Empresariales, Universidad del País Vasco, Avda. Lehendakari Aguirre 83, 48015 Bilbao, Spain

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