Differential mortality and social security |
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Authors: | Antoine Bommier Marie‐Louise Leroux Jean‐Marie Lozachmeur |
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Institution: | 1. Toulouse School of Economics (GREMAQ‐CNRS);2. CORE, Université Catholique de Louvain;3. Toulouse School of Economics (GREMAQ‐CNRS and IDEI) |
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Abstract: | Abstract This paper studies the normative problem of redistribution between individuals who differ in their lifespans. We discuss aspects related to the objective function and argue that aversion to multiperiod inequality should be taken into account. Then, we study the properties of the social optimum both with full information and with asymmetric information. We highlight the role of aversion to multiperiod inequality and show that it has substantial consequences on the design of Social Security schemes. In particular, we show that for a low (resp. high) aversion to multiperiod inequality, a negative (resp. positive) implicit tax rate on continued activity is desirable. |
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Keywords: | D63 H55 H23 I31 |
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