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Retirement age and health expenditures

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  • CREMER, Helmuth
  • LOZACHMEUR, Jean-Marie
  • PESTIEAU, Pierre

Abstract

This Paper studies the design of pension benefits and contributions when an individual’s health status (disutility of continued activity) is endogenous and depends on consumption of health services. Health services can be subsidized (in a linear or non-linear way, depending on the information structure). Uniform public provision of health services is also considered. We show that as with exogenous health status, the second-best policy may induce early retirement for some types of individuals. Furthermore, whatever the specific information structure considered (individual levels or anonymous transactions) for health services, a subsidization of health expenditures obtains under fairly plausible assumptions. Third, when the information structure permits only linear subsidies, the case for uniform public provision of health services (which can be supplemented but not resold) appears to be quite strong.

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Bibliographic Info

Paper provided by Université catholique de Louvain, Center for Operations Research and Econometrics (CORE) in its series CORE Discussion Papers RP with number -1934.

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Handle: RePEc:cor:louvrp:-1934

Note: In : Annales d'Economie et de Statistique, 83-84(2), 167-186, 2006
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References

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  1. CREMER, Helmuth & LOZACHMEUR, Jean-Marie & PESTIEAU, Pierre, 2006. "Disability testing and retirement," CORE Discussion Papers, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE) 2006016, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
  2. Jonathan Gruber, 2000. "Disability Insurance Benefits and Labor Supply," Journal of Political Economy, University of Chicago Press, University of Chicago Press, vol. 108(6), pages 1162-1183, December.
  3. CREMER, Helmuth & LOZACHMEUR, Jean-Marie & PESTIEAU, Pierre, . "Social security, retirement age and optimal income taxation," CORE Discussion Papers RP, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE) -1722, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
  4. CREMER, Helmuth & LOZACHMEUR, Jean-Marie & PESTIEAU, Pierre, . "Optimal retirements and disability benefits with audit," CORE Discussion Papers RP, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE) -1836, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
  5. Jonathan Gruber & David A. Wise, 1999. "Social Security and Retirement around the World," NBER Books, National Bureau of Economic Research, Inc, number grub99-1, October.
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Cited by:
  1. Kuhn, Michael & Wrzaczek, Stefan & Prskawetz, Alexia & Feichtinger, Gustav, 2012. "Optimal choice of health and retirement in a life-cycle model," ECON WPS - Vienna University of Technology Working Papers in Economic Theory and Policy 01/2012, Vienna University of Technology, Institute for Mathematical Methods in Economics, Research Group Economics (ECON).
  2. CREMER, Helmuth & LOZACHMEUR, Jean-Marie & PESTIEAU, Pierre, 2006. "Social security and retirement decision: a positive and normative approach," CORE Discussion Papers, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE) 2006019, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).

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