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Education, Life Expectancy and Pension Reform

Author

Listed:
  • Tim Krieger

    (University of Freiburg)

  • Thomas Lange

    (Univeristy of Konstanz)

Abstract

In a two-period model with agent heterogeneity we analyze a pension reform toward a stronger link between contributions and benefits (as recently observed in several countries) in a pension system with a Bismarckian and a Beveridgean component. We show that such a policy change may discourage human capital investment at the margin and thus reduce the average educational level in an economy. The life expectancy differential between skilled and unskilled individuals drives this result. Furthermore, we investigate the consequences on the intragenerational redistribution characteristics of the pension system –in the sense of the number of net-recipients relative to net-payers– as well as welfare effects.

Suggested Citation

  • Tim Krieger & Thomas Lange, 2012. "Education, Life Expectancy and Pension Reform," Hacienda Pública Española / Review of Public Economics, IEF, vol. 202(3), pages 31-55, September.
    • Handle: RePEc:hpe:journl:y:2012:v:202:i:3:p:31-55
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    References listed on IDEAS

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    Cited by:

    1. Jonas Klos & Tim Krieger & Sven Stöwhase, 2022. "Measuring intra-generational redistribution in PAYG pension schemes," Public Choice, Springer, vol. 190(1), pages 53-73, January.
    2. Tim Krieger & Christine Meemann & Stefan Traub, 2022. "Inequality, Life Expectancy, and the Intragenerational Redistribution Puzzle - Some Experimental Evidence," CESifo Working Paper Series 9677, CESifo.

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    More about this item

    Keywords

    Social Security; Education; Life Expectancy; Pension Reform; Redistribution;
    All these keywords.

    JEL classification:

    • H55 - Public Economics - - National Government Expenditures and Related Policies - - - Social Security and Public Pensions
    • I21 - Health, Education, and Welfare - - Education - - - Analysis of Education
    • D39 - Microeconomics - - Distribution - - - Other

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