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Life Expectancy, Human Capital, Social Security and Growth

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Author Info
Cruz A. Echevarria () (Universidad del País Vasco)
Amaia Iza () (Universidad del País Vasco)

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Abstract

We analyze the effects of changes in the mortality rate upon life expectancy, education, retirement age, human capital and growth in the presence of social security. We build a vintage growth, overlapping generations model in which individuals choose the time length of education and retirement age, and where unfunded social security pensions depend on workers'past contributions. Social security has a positive effect on education, but pension benefits favor reductions in retirement age. The net effect is that starting from a benchmark case, higher life expectancies give rise to lower growth rates in the presence of social security as the share of active population is reduced. In addition, higher social security contribution rates reduce the growth rate.

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Publisher Info
Paper provided by University of the Basque Country - Department of Foundations of Economic Analysis II in its series DFAEII Working Papers with number 200517.

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Date of creation: 01 Jan 2005
Date of revision: 16 Nov 2006
Publication status: Published in Journal of Public Economics 90(12), December, 2006, pp. 2323-2349.
Handle: RePEc:ehu:dfaeii:200517

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Postal: Dpto. de Fundamentos del Análisis Económico II, Facultad de CC. Económicas y Empresariales, Universidad del País Vasco, Avda. Lehendakari Aguirre 83, 48015 Bilbao, Spain
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Related research
Keywords: Mortality Rate; Social Security; Growth;

Other versions of this item:

Find related papers by JEL classification:
O40 - Economic Development, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General
H55 - Public Economics - - National Government Expenditures and Related Policies - - - Social Security and Public Pensions
J10 - Labor and Demographic Economics - - Demographic Economics - - - General

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References listed on IDEAS
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Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Giam Pietro Cipriani & Miltiadis Makris, 2009. "PAYG Pensions and Human Capital Accumulation: Some Unpleasant Arithmetic," CHILD Working Papers wp19_09, CHILD - Centre for Household, Income, Labour and Demographic economics - ITALY. [Downloadable!]
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