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Social security, education retirement and growth

Author

Listed:
  • Cruz A. Echevarría

    (Universidad del País Vasco)

  • Amaia Iza

    (Universidad del País Vasco)

Abstract

This paper analyzes, firstly, the expected effects of social security reforms that have been implemented in Spain after 2004 (and, secondly, the expected effects of reductions in the minimum pension) on retirement decision and human capital accumulation (and hence on growth and on income inequality). Individuals in our model economy differ in their innate ability and growth is a by-product of the most skilled individuals’ productivity. According to our model, i) increases in the minimum and normal retirement ages are expected to have a strong effect, not only on individuals’ retirement decisions, but also on their education investment; ii) augmented incentives to late retirement are not expected to have any effect; iii) reductions in the minimum pension are not expected to have a significant effect unless it is completely eliminated.

Suggested Citation

  • Cruz A. Echevarría & Amaia Iza, 2011. "Social security, education retirement and growth," Hacienda Pública Española / Review of Public Economics, IEF, vol. 198(3), pages 9-36, September.
    • Handle: RePEc:hpe:journl:y:2011:v:198:i:3:p:9-36
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    References listed on IDEAS

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    More about this item

    Keywords

    Social Security; Pay-as-you-go; Voluntary Retirement; Human Capital; Minimum Pen;
    All these keywords.

    JEL classification:

    • O4 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity
    • H3 - Public Economics - - Fiscal Policies and Behavior of Economic Agents

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