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Funded Pensions, Labor Market Participation, and Economic Growth

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  • Eric O'N. Fisher
  • Mark A. Roberts

Abstract

This paper analyses a model of overlapping generations in which agents who are not in the labor market are unable to borrow. An increase in a fully funded pension raises aggregate savings since private savings are not crowded out one-for-one. Labor force participation is determined endogenously, and a rise in the level of fully funded pensions increases aggregate employment. This increase in employment augments growth, directly by raising per capita savings and indirectly by affecting tax and interest rates.

Suggested Citation

  • Eric O'N. Fisher & Mark A. Roberts, 2002. "Funded Pensions, Labor Market Participation, and Economic Growth," FinanzArchiv: Public Finance Analysis, Mohr Siebeck, Tübingen, vol. 59(3), pages 371-386, August.
    • Handle: RePEc:mhr:finarc:urn:sici:0015-2218(2002/200308)59:3_371:fplmpa_2.0.tx_2-b
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    More about this item

    JEL classification:

    • E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy; Modern Monetary Theory
    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure
    • O41 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - One, Two, and Multisector Growth Models

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