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Funded social security and economic growth

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  • Kunze, Lars

Abstract

This paper investigates the relationship between economic growth and a fully funded social security system in an overlapping generations model with family altruism. It is shown that funded social security may harm growth if there are operative bequests within the family.

Suggested Citation

  • Kunze, Lars, 2012. "Funded social security and economic growth," Economics Letters, Elsevier, vol. 115(2), pages 180-183.
    • Handle: RePEc:eee:ecolet:v:115:y:2012:i:2:p:180-183
    DOI: 10.1016/j.econlet.2011.11.032
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    References listed on IDEAS

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    1. Pascal Belan & Philippe Michel & Pierre Pestieau, 1998. "Pareto-Improving Social Security Reform," The Geneva Risk and Insurance Review, Palgrave Macmillan;International Association for the Study of Insurance Economics (The Geneva Association), vol. 23(2), pages 119-125, December.
    2. Kaganovich, Michael & Zilcha, Itzhak, 1999. "Education, social security, and growth," Journal of Public Economics, Elsevier, vol. 71(2), pages 289-309, February.
    3. Michael Kaganovich & Itzhak Zilcha, 2008. "Alternative Social Security Systems and Growth," CESifo Working Paper Series 2353, CESifo.
    4. Lambrecht, Stephane & Michel, Philippe & Vidal, Jean-Pierre, 2005. "Public pensions and growth," European Economic Review, Elsevier, vol. 49(5), pages 1261-1281, July.
    5. Stéphane Lambrecht & Philippe Michel & Emmanuel Thibault, 2006. "Capital Accumulation and Fiscal Policy in an OLG Model with Family Altruism," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 8(3), pages 465-486, August.
    6. Joachim Thøgersen, 2010. "Unemployment, Public Pensions, and Capital Accumulation: Assessing Growth Effects of Alternative Funding Strategies," Journal of Institutional and Theoretical Economics (JITE), Mohr Siebeck, Tübingen, vol. 166(3), pages 502-520, September.
    7. de la Croix,David & Michel,Philippe, 2002. "A Theory of Economic Growth," Cambridge Books, Cambridge University Press, number 9780521001151.
    8. Gábor Gyárfás & Marko Marquardt, 2001. "Pareto improving transition from a pay-as-you-go to a fully funded pension system in a model of endogenous growth," Journal of Population Economics, Springer;European Society for Population Economics, vol. 14(3), pages 445-453.
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    Citations

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    Cited by:

    1. Maebayashi, Noritaka, 2018. "Is an unfunded social security system good or bad for growth? A theoretical analysis of social security systems financed by VAT," MPRA Paper 90881, University Library of Munich, Germany.
    2. Yangming Hu & Yingjun Wu & Wei Zhou & Tao Li & Liqing Li, 2020. "A three-stage DEA-based efficiency evaluation of social security expenditure in China," PLOS ONE, Public Library of Science, vol. 15(2), pages 1-12, February.
    3. Noritaka Maebayashi, 2020. "Is an unfunded social security system good or bad for growth? A theoretical analysis of social security systems financed by VAT," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 22(4), pages 1069-1104, August.
    4. Cui, Xiaodong & Chang, Ching-Ter, 2020. "How life expectancy affects welfare in a Diamond-type overlapping generations model," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 555(C).
    5. Hyeon Park, 2018. "Loss aversion and social security: a general equilibrium approach," International Review of Economics, Springer;Happiness Economics and Interpersonal Relations (HEIRS), vol. 65(1), pages 51-75, March.
    6. Wei Gao & Chengliang Yan & Fuyang Zhao, 2021. "Longevity, Grandparents Caring, and PAYG Pensions," Annals of Economics and Finance, Society for AEF, vol. 22(2), pages 451-465, November.
    7. Kunze, Lars, 2014. "Life expectancy and economic growth," Journal of Macroeconomics, Elsevier, vol. 39(PA), pages 54-65.

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    More about this item

    Keywords

    Funded social security; Growth; Family altruism;
    All these keywords.

    JEL classification:

    • D9 - Microeconomics - - Micro-Based Behavioral Economics
    • H3 - Public Economics - - Fiscal Policies and Behavior of Economic Agents
    • I2 - Health, Education, and Welfare - - Education
    • O4 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity

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