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The Effect of Pension on the Optimized Life Expectancy and Lifetime Utility Level

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  • Shin, Inyong

Abstract

In this paper, we analyze the effect of a pension system on the life expectancy and the lifetime utility level using an optimal dynamic problem of individuals who live in continuous and finite time. Our model yields a number of intriguing results: 1) Life expectancy is not always proportional to lifetime utility. 2) The pension system can make life expectancy longer or shorter. 3) It is not always true that the pension system improves the lifetime utility level.

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File URL: http://mpra.ub.uni-muenchen.de/41375/
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Bibliographic Info

Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 41375.

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Date of creation: Sep 2012
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Handle: RePEc:pra:mprapa:41375

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Keywords: Pension system; Optimized life expectancy; Lifetime utility level; Health investments;

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  1. Pecchenino, Rowena A & Pollard, Patricia S, 1997. "The Effects of Annuities, Bequests, and Aging in an Overlapping Generations Model of Endogenous Growth," Economic Journal, Royal Economic Society, Royal Economic Society, vol. 107(440), pages 26-46, January.
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  6. Pierre Pestieau & Gregory Ponthiere, 2012. "The Public Economics of Increasing Longevity," Hacienda Pública Española, IEF, IEF, vol. 200(1), pages 41-74, March.
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  8. de la Croix, David & Licandro, Omar, 1999. "Life expectancy and endogenous growth," Economics Letters, Elsevier, Elsevier, vol. 65(2), pages 255-263, November.
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  11. Kelvin R. Utendorf & Rowena A. Pecchenino, 1999. "Social security, social welfare and the aging population," Journal of Population Economics, Springer, Springer, vol. 12(4), pages 607-623.
  12. Dushi, Irena & Friedberg, Leora & Webb, Tony, 2010. "The impact of aggregate mortality risk on defined benefit pension plans," Journal of Pension Economics and Finance, Cambridge University Press, Cambridge University Press, vol. 9(04), pages 481-503, October.
  13. Martin S. Feldstein & Jeffrey B. Liebman, 2002. "Introduction to "The Distributional Aspects of Social Security and Social Security Reform"," NBER Chapters, in: The Distributional Aspects of Social Security and Social Security Reform, pages 1-10 National Bureau of Economic Research, Inc.
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  15. Bohn, Henning, 2009. "Intergenerational risk sharing and fiscal policy," Journal of Monetary Economics, Elsevier, Elsevier, vol. 56(6), pages 805-816, September.
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  17. Sanchez-Marcos, Virginia & Sanchez-Martin, Alfonso R., 2006. "Can social security be welfare improving when there is demographic uncertainty?," Journal of Economic Dynamics and Control, Elsevier, Elsevier, vol. 30(9-10), pages 1615-1646.
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  22. Martin Feldstein & Jeffrey B. Liebman, 2002. "The Distributional Aspects of Social Security and Social Security Reform," NBER Books, National Bureau of Economic Research, Inc, number feld02-1, July.
  23. Pecchenino, Rowena A. & Pollard, Patricia S., 2002. "Dependent children and aged parents: funding education and social security in an aging economy," Journal of Macroeconomics, Elsevier, Elsevier, vol. 24(2), pages 145-169, June.
  24. Boucekkine, Raouf & de la Croix, David & Licandro, Omar, 2000. "Vintage Human Capital, Demographic Trends and Endogenous Growth," Discussion Papers (IRES - Institut de Recherches Economiques et Sociales), Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES) 2000007, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES).
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  26. Michael Gorski & Tim Krieger & Thomas Lange, 2007. "Pensions, Education and Life Expectancy," Working Papers CIE 4, University of Paderborn, CIE Center for International Economics.
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