PAYG Pensions and Human Capital Accumulation: Some Unpleasant Arithmetic

Giam Pietro Cipriani and Miltiadis Makris

CHILD Working Papers from CHILD - Centre for Household, Income, Labour and Demographic economics - ITALY

Abstract: A large literature has studied the effects of PAYG systems on fertility, human capital and growth. We argue that the social security system may also interact with longevity when the latter is endogenously determined. We show that in such an environment, in a dynamically efficient economy PAYG pensions must be sufficiently low in order to ensure positive economic growth. Moreover, a transition to a funded social security system will promote growth, and can thereby take place by fully compensating the losers.

Keywords: Pensions; Human Capital; Growth; Endogenous Longevity (search for similar items in EconPapers)
JEL-codes: H55 J10 O10 (search for similar items in EconPapers)
Pages: 19 pages
Date: 2009-07
New Economics Papers: this item is included in nep-age and nep-dge
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Related works:
Journal Article: PAYG PENSIONS AND HUMAN CAPITAL ACCUMULATION: SOME UNPLEASANT ARITHMETIC (2012)
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Persistent link: https://EconPapers.repec.org/RePEc:wpc:wplist:wp19_09

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