Growth and Social Security: The Role of Human Capital

Alexander Kemnitz and Berthold Wigger (berthold.wigger@googlemail.com)

CSEF Working Papers from Centre for Studies in Economics and Finance (CSEF), University of Naples, Italy

Abstract: This paper studies the growth and efficiency effects of pay-as-you-go financed social security when human capital is the engine of growth. Employing a variant of the Lucas (1988) model with overlapping generations, it is shown that a properly designed unfunded social security system leads to higher output growth than a fully funded one. Furthermore, the economy with unfunded social security is efficient while the other one is not. These results stand in sharp contrast to those that obtain in models where economic growth is driven by physical capital accumulation.

Keywords: Endogenous Growth; Social Security; Human Capital (search for similar items in EconPapers)
JEL-codes: H55 O41 (search for similar items in EconPapers)
Date: 2000-01-01
New Economics Papers: this item is included in nep-lab, nep-pbe and nep-pub
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (40)

Published in European Journal of Political Economy, 2000, vol. 16, pages 673-683

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Journal Article: Growth and social security: the role of human capital (2000)
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Persistent link: https://EconPapers.repec.org/RePEc:sef:csefwp:33

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