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Retirement Age and Health Expenditures

  • Cremer, Helmuth
  • Lozachmeur, Jean-Marie
  • Pestieau, Pierre

We study the design of pension benefits and contributions when an individual's health status depends on his consumption of health services. Health services can be subsidized and their uniform public provision is also considered. We show that the second-best policy induces early retirement and that health expenditures ought to be subsidized under plausible assumptions. When only linear subsidies are available, the case for uniform public provision of health services appears to be quite strong.

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Paper provided by Institut d'Économie Industrielle (IDEI), Toulouse in its series IDEI Working Papers with number 306.

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Date of creation: Sep 2004
Date of revision:
Publication status: Published in Annales d'Économie et de Statistique, vol. 83-84, Institut national de la statistique et des études économiques, Paris, 2006, p. 167-186.
Handle: RePEc:ide:wpaper:2989
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  1. Helmuth Cremer & Jean-Marie Lozachmeur & Pierre Pestieau, 2002. "Social Security, Retirement Age and Optimal Income Taxation," CESifo Working Paper Series 693, CESifo Group Munich.
  2. Jonathan Gruber & David A. Wise, 1999. "Social Security and Retirement around the World," NBER Books, National Bureau of Economic Research, Inc, number grub99-1, September.
  3. Jonathan Gruber & David A. Wise, 1999. "Introduction to "Social Security and Retirement around the World"," NBER Chapters, in: Social Security and Retirement around the World, pages 1-35 National Bureau of Economic Research, Inc.
  4. Cremer, Helmuth & Gahvari, Firouz, 1997. "In-kind transfers, self-selection and optimal tax policy," European Economic Review, Elsevier, vol. 41(1), pages 97-114, January.
  5. CREMER, Helmuth & LOZACHMEUR, Jean-Marie & PESTIEAU, Pierre, . "Optimal retirements and disability benefits with audit," CORE Discussion Papers RP 1836, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
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