Social security reform and investment in education: Is there scope for a Pareto improvement?

Köthenbürger, Marko und Poutvaara, Panu (2006): Social security reform and investment in education: Is there scope for a Pareto improvement? In: Economica, Bd. 73, Nr. 290: S. 299-319

Abstract

We propose a Pareto-improving policy which reduces the overall wage taxburden in an economy with intergenerational trade in a fixed factor ofproduction, here labelled as land. We analyse a second-best environmentin which the government cannot resort to non-distortionary land taxes.Reducing the social security contribution rate encourages investment inhuman capital. Future efficiency gains accruing to complementary landare capitalized in its value. The capital gains may compensateland-owning pensioners for reduced benefits. We also explain why theunfunded pension system may have lost its appeal even for pensionersafter its introduction.

• Dokumententyp: Zeitschriftenartikel
• Fakultät: Volkswirtschaft ; Volkswirtschaft > Lehrstühle > CESifo-Professur für Vergleichende Institutionenökonomik
• Themengebiete: 300 Sozialwissenschaften > 330 Wirtschaft
• Sprache: Englisch