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Education, Life Expectancy and Pension Reform


  • Tim Krieger

    () (University of Freiburg)

  • Thomas Lange

    () (Univeristy of Konstanz)


In a two-period model with agent heterogeneity we analyze a pension reform toward a stronger link between contributions and benefits (as recently observed in several countries) in a pension system with a Bismarckian and a Beveridgean component. We show that such a policy change may discourage human capital investment at the margin and thus reduce the average educational level in an economy. The life expectancy differential between skilled and unskilled individuals drives this result. Furthermore, we investigate the consequences on the intragenerational redistribution characteristics of the pension system –in the sense of the number of net-recipients relative to net-payers– as well as welfare effects.

Suggested Citation

  • Tim Krieger & Thomas Lange, 2012. "Education, Life Expectancy and Pension Reform," Hacienda Pública Española, IEF, vol. 202(3), pages 31-55, September.
  • Handle: RePEc:hpe:journl:y:2012:v:202:i:3:p:31-55

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    References listed on IDEAS

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    More about this item


    Social Security; Education; Life Expectancy; Pension Reform; Redistribution;

    JEL classification:

    • H55 - Public Economics - - National Government Expenditures and Related Policies - - - Social Security and Public Pensions
    • I21 - Health, Education, and Welfare - - Education - - - Analysis of Education
    • D39 - Microeconomics - - Distribution - - - Other


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