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Longevity Variations and the Welfare State

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  • Pestieau, P.

    () (Université catholique de Louvain, CORE, Belgium)

  • Ponthiere, G.

    () (University Paris East)

Abstract

Life expectancy at birth has more than doubled in Europe since the early 19th century. This demographic trend constitutes a major victory against scarcity, but raises also deep challenges to the Welfare State, concerning the sustainability and the equity of the social security system. This paper surveys recent developments in the economic analysis of longevity, both at the positive and the normative levels. Taking mortality risks into account is shown to affect the study of the lifecycle model significantly, in particular concerning the strength of life horizon effects. It raises also, at the level of normative foundations for policy-making, a dilemma between ex ante and ex post valuations. Finally, we explore the design of policy reforms under varying longevity, in fields including preventive and curative policies, education, pension, and wealth taxation.

Suggested Citation

  • Pestieau, P. & Ponthiere, G., 2015. "Longevity Variations and the Welfare State," CORE Discussion Papers 2015027, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
  • Handle: RePEc:cor:louvco:2015027
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Haan, Peter & Kemptner, Daniel & Lüthen, Holger, 2017. "The Rising Longevity Gap by Lifetime Earnings: Distributional Implications for the Pension System," IZA Discussion Papers 11121, Institute for the Study of Labor (IZA).
    2. Pestieau, Pierre & Racionero, Maria, 2016. "Harsh occupations, life expectancy and social security," Economic Modelling, Elsevier, vol. 58(C), pages 194-202.
    3. repec:hal:wpaper:halshs-01230932 is not listed on IDEAS
    4. Yukihiro Nishimura & Pierre Pestieau & Grégory Ponthière, 2015. "Education Choices, Longevity and Optimal Policy in a Ben-Porath Economy," PSE Working Papers halshs-01230932, HAL.
    5. Sanchez-Romero, Miguel & Fürnkranz-Prskawetz, Alexia, 2017. "Redistributive effects of the US pension system among individuals with different life expectancy," ECON WPS - Vienna University of Technology Working Papers in Economic Theory and Policy 03/2017, Vienna University of Technology, Institute for Mathematical Methods in Economics, Research Group Economics (ECON).

    More about this item

    Keywords

    longevity; mortality risk; inequalities; life cycle; Welfare State;

    JEL classification:

    • J10 - Labor and Demographic Economics - - Demographic Economics - - - General
    • J18 - Labor and Demographic Economics - - Demographic Economics - - - Public Policy
    • H55 - Public Economics - - National Government Expenditures and Related Policies - - - Social Security and Public Pensions

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