Pollution and Growth: The Role of Pension on the Efficiency of Health and Environmental Policies
Armel Ngami and
Thomas Seegmuller ()
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Thomas Seegmuller: GREQAM - Groupement de Recherche en Économie Quantitative d'Aix-Marseille - ECM - Ecole Centrale de Marseille - CNRS - Centre National de la Recherche Scientifique - AMU - Aix Marseille Université - EHESS - École des hautes études en sciences sociales
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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: pollution; health; pension system; environment; longevity; growth (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-age, nep-dge, nep-ene, nep-env, nep-hea and nep-res
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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:hal:wpaper:halshs-01798710
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