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Payg Pensions And Human Capital Accumulation: Some Unpleasant Arithmetic

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  • GIAM PIETRO CIPRIANI
  • MILTIADIS MAKRIS

Abstract

A large literature has studied the effects of PAYG systems on fertility, human capital and growth. We argue that the social security system may also interact with longevity when the latter is endogenously determined. We show that in such an environment, in a dynamically efficient economy PAYG pensions must be sufficiently low in order to ensure positive economic growth. Moreover, a transition to a funded social security system will promote growth, and can thereby take place by fully compensating the losers.
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  • Giam Pietro Cipriani & Miltiadis Makris, 2012. "Payg Pensions And Human Capital Accumulation: Some Unpleasant Arithmetic," Manchester School, University of Manchester, vol. 80(4), pages 429-446, July.
    • Handle: RePEc:bla:manchs:v:80:y:2012:i:4:p:429-446
    DOI: j.1467-9957.2011.02251.x
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    More about this item

    JEL classification:

    • H55 - Public Economics - - National Government Expenditures and Related Policies - - - Social Security and Public Pensions
    • J10 - Labor and Demographic Economics - - Demographic Economics - - - General
    • O10 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - General

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