Increased Pension Savings: Blessing or Curse? Social Security Reform in a Two-Sector Growth Model
AbstractThis paper analyses the consequences of a switch to a more funded pension scheme for economic growth in an economy that consists of a capital-intensive commodity sector with endogenous growth and a labour-intensive services sector. The increased savings cause long-run growth to be higher in a closed economy, provided capital and labour are not strong substitutes. The reverse holds for a small open economy. More funding can therefore turn out to be a curse instead of a blessing for future generations, unless countries implement their reforms simultaneously or impose a tax on labour-intensive services. Copyright (c) The London School of Economics and Political Science 2006.
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Bibliographic InfoArticle provided by London School of Economics and Political Science in its journal Economica.
Volume (Year): 74 (2007)
Issue (Month): 296 (November)
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- repec:hal:wpaper:halshs-00279167 is not listed on IDEAS
- Christophe Hachon, 2008.
"Redistribution, Pension Systems and Capital Accumulation,"
Financial Theory and Practice,
Institute of Public Finance, vol. 32(3), pages 339-368.
- Christophe Hachon, 2008. "Redistribution, Pension Systems and Capital Accumulation," UniversitÃ© Paris1 PanthÃ©on-Sorbonne (Post-Print and Working Papers) halshs-00279167, HAL.
- Donald A. R. George (University of Edinburgh), 2013. "A two-sector growth model with institutional saving and investment," ESE Discussion Papers 214, Edinburgh School of Economics, University of Edinburgh.
- Christophe Hachon, 2010. "Do Beveridgian pension systems increase growth?," Journal of Population Economics, Springer, vol. 23(2), pages 825-831, March.
- Fanti, Luciano & Gori, Luca, 2009. "A two-sector OLG economy: economic growth and demographic behaviour," MPRA Paper 18869, University Library of Munich, Germany.
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