LONGEVITY AND PUBLIC OLD-AGE PENSIONS |
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| Authors: | Liqun Liu rew J Rettenmaier Thomas R Saving |
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| Institution: | Liu:;Associate Research Scientist, Private Enterprise Research Center, Texas A&M University, College Station, TX 77843. Phone 1-979-845-7723, Fax 1-979-845-6636, Email Rettenmaier:;Executive Associate Director, Private Enterprise Research Center, Texas A&M University, 4231 TAMU College Station, TX 77843. Phone 1-979-845-9658, Fax 1-979-845-6636, Email Saving:;Director and Distinguished Professor of Economics, Private Enterprise Research Center, Texas A&M University, College Station, TX 77843. Phone 1-979-845-7659, Fax 1-979-845-6636, Email |
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| Abstract: | 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 ) |
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