Premium
LONGEVITY AND PUBLIC OLD‐AGE PENSIONS
Author(s) -
Liu Liqun,
Rettenmaier Andrew J.,
Saving Thomas R.
Publication year - 2005
Publication title -
economic inquiry
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.823
H-Index - 72
eISSN - 1465-7295
pISSN - 0095-2583
DOI - 10.1093/ei/cbi017
Subject(s) - longevity , economics , overlapping generations model , life expectancy , golden rule , population , longevity risk , demographic economics , labour economics , biology , demography , sociology , political science , genetics , law
Using an overlapping generations model with endogenous but uncertain longevity, this article analyzes the effects of public old‐age pensions on longevity choice and capital accumulation. When agents are not altruistic, increases in old‐age pensions are longevity‐neutral for golden rule economies and longevity‐decreasing if interest rates exceed population growth, and saving effects are strictly negative. When agents are altruistic, longevity is independent of old‐age pensions regardless of the interest rate–population growth relation. On the other hand, the longevity effect of a price subsidy on longevity extending expenditures or an advance in longevity extending technology is positive.(JEL H5 , J1 )