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Occupational risks, social insurance and investments in education

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Author Info

  • Dan Anderberg

    ()
    (Department of Economics, Heriot-Watt University, Riccarton Edinburgh EH14 4AS, United Kingdom.)

Abstract

A link between social insurance and education policy is explored. Due to moral hazard full insurance against disability is not feasible. When high- and low-risk individuals can be identified second-best social insurance system entails cross-subsidies from the low-risk group to the high-risk group. Implementation of this second-best insurance however distorts the human capital investment decisions when education qualifies for a low risk job. Therefore, the second-best social insurance together with an education subsidy is a welfare improving policy. An education policy also has the role of establishing dynamic consistency of the government's policy.

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Bibliographic Info

Article provided by Springer in its journal Journal of Population Economics.

Volume (Year): 13 (2000)
Issue (Month): 3 ()
Pages: 425-441

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Handle: RePEc:spr:jopoec:v:13:y:2000:i:3:p:425-441

Note: Received: 16 October 1998/Accepted: 8 September 1999
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Related research

Keywords: Disability pensions · time consistency · education policy;

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