Optimal social insurance and health inequality

Volker Grossmann and Holger Strulik

No 302, University of Göttingen Working Papers in Economics from University of Goettingen, Department of Economics

Abstract: This paper integrates into public economics a biologically founded, stochastic process of individual ageing. The novel approach enables us to quantitatively characterize the optimal joint design of health and retirement policy behind the veil of ignorance for today and in response to future medical progress. Calibrating our model to Germany, we find that future progress in medical technology calls for a potentially drastic increase in health spending that typically should be accompanied by a lower pension savings rate and a higher retirement age. Interestingly, medical progress and higher health spending are in conflict with the goal to reduce health inequality.

Keywords: ageing; health expenditure; health inequality; social security system; retirement age (search for similar items in EconPapers)
JEL-codes: C60 H50 I10 (search for similar items in EconPapers)
Date: 2017
New Economics Papers: this item is included in nep-age, nep-hea, nep-ias and nep-pbe
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

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https://www.econstor.eu/bitstream/10419/149870/1/879268808.pdf (application/pdf)

Related works:
Journal Article: Optimal Social Insurance and Health Inequality (2019)
Journal Article: Optimal Social Insurance and Health Inequality (2019)
Working Paper: Optimal Social Insurance and Health Inequality (2015)
Working Paper: Optimal social insurance and health inequality (2015)
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:cegedp:302

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