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The Effect of Pension on the Optimized Life Expectancy and Lifetime Utility Level

  • Shin, Inyong

In this paper, we analyze the effect of a pension system on the life expectancy and the lifetime utility level using a cross country data and an optimal dynamic problem of individuals who live in continuous and finite time. From the data, we find that 1) Happiness can be almost explained by income per capita. 2) Depending on income per capita, the pension system can make life span longer or shorter and can raise or reduce the level of happiness. Our model yields some results which are consistent with the results from the data: i) Life expectancy is not always proportional to lifetime utility. ii) The pension system can make life expectancy longer or shorter. This paper suggests that it is not always true that the pension system improves the lifetime utility level.

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File URL: http://mpra.ub.uni-muenchen.de/41374/1/MPRA_paper_41374.pdf
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Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 41374.

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Date of creation: Sep 2012
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Handle: RePEc:pra:mprapa:41374
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  1. Dirk Krueger & Felix Kubler, 2002. "Intergenerational Risk-Sharing via Social Security when Financial Markets Are Incomplete," American Economic Review, American Economic Association, vol. 92(2), pages 407-410, May.
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  9. BOUCEKKINE, Raouf & DE LA CROIX, David & LICANDRO, Omar, . "Early mortality declines at the dawn of modern growth," CORE Discussion Papers RP -1681, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
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  24. Michael Gorski & Tim Krieger & Thomas Lange, 2007. "Pensions, Education and Life Expectancy," Working Papers CIE 4, University of Paderborn, CIE Center for International Economics.
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  26. repec:hal:wpaper:halshs-00676492 is not listed on IDEAS
  27. Zhang, Jie & Zhang, Junsen & Lee, Ronald, 2003. "Rising longevity, education, savings, and growth," Journal of Development Economics, Elsevier, vol. 70(1), pages 83-101, February.
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