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Longevity variations and the welfare state

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  • Pierre Pestieau

    (CORE - Center of Operation Research and Econometrics [Louvain] - UCL - Université Catholique de Louvain, PJSE - Paris Jourdan Sciences Economiques - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS Paris - École normale supérieure - Paris - PSL - Université Paris sciences et lettres - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement, PSE - Paris School of Economics - ENPC - École des Ponts ParisTech - ENS Paris - École normale supérieure - Paris - PSL - Université Paris sciences et lettres - UP1 - Université Paris 1 Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique - EHESS - École des hautes études en sciences sociales - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement)

  • Grégory Ponthière

    (PJSE - Paris Jourdan Sciences Economiques - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS Paris - École normale supérieure - Paris - PSL - Université Paris sciences et lettres - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement, PSE - Paris School of Economics - ENPC - École des Ponts ParisTech - ENS Paris - École normale supérieure - Paris - PSL - Université Paris sciences et lettres - UP1 - Université Paris 1 Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique - EHESS - École des hautes études en sciences sociales - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement, ERUDITE - Equipe de Recherche sur l’Utilisation des Données Individuelles en lien avec la Théorie Economique - UPEC UP12 - Université Paris-Est Créteil Val-de-Marne - Paris 12 - UPEM - Université Paris-Est Marne-la-Vallée)

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 protection 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 life cycle 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

  • Pierre Pestieau & Grégory Ponthière, 2016. "Longevity variations and the welfare state," PSE-Ecole d'économie de Paris (Postprint) halshs-01509666, HAL.
  • Handle: RePEc:hal:pseptp:halshs-01509666
    DOI: 10.1017/dem.2016.4
    Note: View the original document on HAL open archive server: https://halshs.archives-ouvertes.fr/halshs-01509666
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    Cited by:

    1. Haan, Peter & Kemptner, Daniel & Lüthen, Holger, 2020. "The rising longevity gap by lifetime earnings – Distributional implications for the pension system," The Journal of the Economics of Ageing, Elsevier, vol. 17(C).
    2. Nishimura, Yukihiro & Pestieau, Pierre & Ponthiere, Gregory, 2018. "Education choices, longevity and optimal policy in a Ben-Porath economy," Mathematical Social Sciences, Elsevier, vol. 94(C), pages 65-81.
    3. Graziella Caselli & Rosa Maria Lipsi, 2018. "Survival inequalities and redistribution in the Italian pension system," Vienna Yearbook of Population Research, Vienna Institute of Demography (VID) of the Austrian Academy of Sciences in Vienna, vol. 16(1), pages 083-110.
    4. Simonovits, András, 2019. "Merev vagy rugalmas nyugdíjkorhatár? Áttekintés [Rigid versus flexible retiring age: a survey]," Közgazdasági Szemle (Economic Review - monthly of the Hungarian Academy of Sciences), Közgazdasági Szemle Alapítvány (Economic Review Foundation), vol. 0(4), pages 345-375.
    5. Miguel Sanchez-Romero & Alexia Prskawetz, 2020. "The Impact of Reducing the Pension Generosity on Inequality and Schooling," De Economist, Springer, vol. 168(2), pages 279-304, June.
    6. Pestieau, Pierre & Racionero, Maria, 2016. "Harsh occupations, life expectancy and social security," Economic Modelling, Elsevier, vol. 58(C), pages 194-202.
    7. Sánchez-Romero, Miguel & Prskawetz, Alexia, 2017. "Redistributive effects of the US pension system among individuals with different life expectancy," The Journal of the Economics of Ageing, Elsevier, vol. 10(C), pages 51-74.
    8. Simonovits, András, 2018. "Hogyan tervezzük a nyugdíjjáradék-függvényt, ha a halandóság a kereset csökkenő függvénye? [Designing pension-benefit schedules when longevities increase with wages]," Közgazdasági Szemle (Economic Review - monthly of the Hungarian Academy of Sciences), Közgazdasági Szemle Alapítvány (Economic Review Foundation), vol. 0(7), pages 831-846.
    9. Rachel WINGENBACH & Jong-Min KIM & Hojin JUNG, 2020. "Living Longer in High Longevity Risk," JODE - Journal of Demographic Economics, Cambridge University Press, vol. 86(1), pages 47-86, March.

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    More about this item

    Keywords

    longevity; europe;

    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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