Optimal paternalistic health and human capital policies

Marcelo Arbex and Enlinson Mattos

No 465, Textos para discussão from FGV EESP - Escola de Economia de São Paulo, Fundação Getulio Vargas (Brazil)

Abstract: We study optimal human and health linear policies when there is a paternalistic motive to overcome present bias problems of agents with heterogeneous cognitive skills. The paternalistic intervention rewards individuals for physical capital accumulation and the combined e ect of health and human capital on future earnings. Our results highlight a novel e ect of paternalistic policies due to the interaction between present-biased preferences and cognitive skills. We illustrate numerically that this policy package is the most e ective and we analyze the relevance of agent's cognitive skills and present-biased preferences for the determination of rst-best and constrained rst-best optimal policies.

Date: 2018-02-16
New Economics Papers: this item is included in nep-hea, nep-isf, nep-knm and nep-upt
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Related works:
Working Paper: Optimal Paternalistic Health and Human Capital Policies (2017)
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Persistent link: https://EconPapers.repec.org/RePEc:fgv:eesptd:465

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