Should we subsidize longevity?

Marie-Louise Leroux, Pierre Pestieau and Gregory Ponthiere

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Abstract: This paper studies the design of the optimal non linear taxation in an economy where longevity varies across agents, and depends on three factors: longevity genes, health investment and farsightedness. Provided earnings, farsightedness and genes are correlated, governmental intervention can be justi.ed on two grounds: correction for a lack of farsightedness and redistribution across both earnings and genetic dimensions. Whether longevity-enhancing spending should be subsidized or taxed is shown to depend on the combined effects of myopia, self-selection and free-riding on the annuity returns. Our policy conclusions depend also on how productivity and genes are correlated, on the complementarity of genes and efforts in the survival function, and on how the government weights the welfare of heterogeneous agents. All in all, it might be desirable to tax longevity-enhancing spending.

Keywords: optimal taxation; longevity; genetic background; heterogeneity; myopia; taxation optimale; longévité; bagage génétique; hétérogénéité; myopie (search for similar items in EconPapers)
Date: 2008-09
Note: View the original document on HAL open archive server: https://shs.hal.science/halshs-00586236v1
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Citations: View citations in EconPapers (8)

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Related works:
Working Paper: Should we Subsidize Longevity? (2009)
Working Paper: Should we subsidize longevity? (2008)
Working Paper: Should we subsidize longevity? (2008)
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