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Capital-skill complementarity and the redistributive effects of Social Security Reform

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  • Casarico, Alessandra
  • Devillanova, Carlo

Abstract

This paper analyses the general equilibrium implications of reforming pay-as-you-go pension systems in an economy with heterogeneous agents, human capital investment and capital-skill complementarity. It shows that increasing funding, by raising savings, delivers in the long run higher physical and human capital and therefore higher output, but also higher across-group wage and income inequality. It also shows that the general equilibrium effects induced by this reform affect groups' sizes in a way that the higher across-group inequality generated by more funding goes with a larger share of the population against redistribution.

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Bibliographic Info

Article provided by Elsevier in its journal Journal of Public Economics.

Volume (Year): 92 (2008)
Issue (Month): 3-4 (April)
Pages: 672-683

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Handle: RePEc:eee:pubeco:v:92:y:2008:i:3-4:p:672-683

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Web page: http://www.elsevier.com/locate/inca/505578

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Citations

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Cited by:
  1. repec:hal:wpaper:halshs-00279167 is not listed on IDEAS
  2. Christophe Hachon, 2010. "Éducation et progressivité des systèmes de retraite. Quand les inégalités face à la mort comptent," Revue économique, Presses de Sciences-Po, vol. 0(4), pages 751-769.
  3. Christophe Hachon, 2008. "Redistribution, Pension Systems and Capital Accumulation," Financial Theory and Practice, Institute of Public Finance, vol. 32(3), pages 339-368.
  4. Wolfgang Kuhle, 2012. "The Dynamics of Utility in the Neoclassical OLG Model," Working Paper Series of the Max Planck Institute for Research on Collective Goods 2012_22, Max Planck Institute for Research on Collective Goods.
  5. Kuhle, Wolfgang, 2012. "Dynamic efficiency and the two-part golden rule with heterogeneous agents," Journal of Macroeconomics, Elsevier, vol. 34(4), pages 992-1006.
  6. Fernando, Estrada & Jorge Ivan, Gonzalez & Alberto, Castrillon & Mauricio, Perez, 2010. "Problemas fiscales y redistributivos en Colombia
    [Redistributive fiscal problems in Colombia]
    ," MPRA Paper 20518, University Library of Munich, Germany.
  7. Estrada, Fernando, 2012. "Estado y política pública en Colombia
    [State and Public Policy in Colombia]
    ," MPRA Paper 42380, University Library of Munich, Germany.
  8. Estrada, Fernando, 2010. "Devouring the Leviathan: fiscal policy and public expenditure in Colombia," MPRA Paper 21981, University Library of Munich, Germany.
  9. repec:hal:wpaper:halshs-00285040 is not listed on IDEAS
  10. Fernando, Estrada, 2013. "Estado y política pública en Colombia: Un balance desde la teoría política
    [State and public policy in Colombia]
    ," MPRA Paper 45223, University Library of Munich, Germany.

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