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Social security and growth in an aging economy : the case of acturial fairness

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  • Gilles Le Garrec

    (OFCE - Observatoire français des conjonctures économiques (Sciences Po) - Sciences Po - Sciences Po)

Abstract

In many European countries, due to population aging, the switch from conventional unfunded public pension systems to notional systems character- ized by individual accounts is in debate. In this article, we develop an OLG model in which endogenous growth is based on an accumulation of knowledge driven by the proportion of skilled workers and the time they have spent to be trained. In such a framework, we show that conventional pension systems, contrary to notional systems, can enhance economic growth by linking bene- ts only to partial earnings history. Thus, considering economic growth, the optimal adjustment to aging could consist in increasing the size of existing retirement systems rather than switching to notional systems.

Suggested Citation

  • Gilles Le Garrec, 2012. "Social security and growth in an aging economy : the case of acturial fairness," Working Papers hal-01070354, HAL.
    • Handle: RePEc:hal:wpaper:hal-01070354
    Note: View the original document on HAL open archive server: https://sciencespo.hal.science/hal-01070354
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    More about this item

    Keywords

    social security; intertemporal choice; human capital;
    All these keywords.

    JEL classification:

    • H55 - Public Economics - - National Government Expenditures and Related Policies - - - Social Security and Public Pensions
    • D91 - Microeconomics - - Micro-Based Behavioral Economics - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making
    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity

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