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Differential mortality and social security

Author

Listed:
  • Antoine Bommier
  • Marie‐Louise Leroux
  • Jean‐Marie Lozachmeur

Abstract

This paper studies the normative problem of redistribution between individuals who differ in their lifespans. We discuss aspects related to the objective function and argue that aversion to multiperiod inequality should be taken into account. Then, we study the properties of the social optimum both with full information and with asymmetric information. We highlight the role of aversion to multiperiod inequality and show that it has substantial consequences on the design of Social Security schemes. In particular, we show that for a low (resp. high) aversion to multiperiod inequality, a negative (resp. positive) implicit tax rate on continued activity is desirable. Ce mémoire étudie le problème normatif de la redistribution entre individus qui ont des durées de vie différentes. On discute certains aspects reliés à la fonction objective et on montre que l'aversion à l'inégalité sur plusieurs périodes doit être prise en compte. On étudie les propriétés de l'optimum social à la fois dans les cas d'information complète et d'information asymétrique. On souligne le rôle de l'aversion à l'inégalité sur plusieurs périodes, et on montre qu'elle a des conséquences importantes sur le design des régimes de sécurité sociale. En particulier, on montre que pour une faible (haute) aversion à l'inégalité, un taux d'imposition implicite négatif (positif) sur la continuation des activités est désirable.

Suggested Citation

  • Antoine Bommier & Marie‐Louise Leroux & Jean‐Marie Lozachmeur, 2011. "Differential mortality and social security," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 44(1), pages 273-289, February.
    • Handle: RePEc:wly:canjec:v:44:y:2011:i:1:p:273-289
    DOI: 10.1111/j.1540-5982.2010.01632.x
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    More about this item

    JEL classification:

    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • H55 - Public Economics - - National Government Expenditures and Related Policies - - - Social Security and Public Pensions
    • H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
    • I31 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - General Welfare, Well-Being

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