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Occupational risks, social insurance and investments in education


  • Dan Anderberg

    () (Department of Economics, Heriot-Watt University, Riccarton Edinburgh EH14 4AS, United Kingdom.)


A link between social insurance and education policy is explored. Due to moral hazard full insurance against disability is not feasible. When high- and low-risk individuals can be identified second-best social insurance system entails cross-subsidies from the low-risk group to the high-risk group. Implementation of this second-best insurance however distorts the human capital investment decisions when education qualifies for a low risk job. Therefore, the second-best social insurance together with an education subsidy is a welfare improving policy. An education policy also has the role of establishing dynamic consistency of the government's policy.

Suggested Citation

  • Dan Anderberg, 2000. "Occupational risks, social insurance and investments in education," Journal of Population Economics, Springer;European Society for Population Economics, vol. 13(3), pages 425-441.
  • Handle: RePEc:spr:jopoec:v:13:y:2000:i:3:p:425-441
    Note: Received: 16 October 1998/Accepted: 8 September 1999

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    More about this item


    Disability pensions · time consistency · education policy;

    JEL classification:

    • H21 - Public Economics - - Taxation, Subsidies, and Revenue - - - Efficiency; Optimal Taxation
    • H42 - Public Economics - - Publicly Provided Goods - - - Publicly Provided Private Goods
    • I28 - Health, Education, and Welfare - - Education - - - Government Policy


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