Health investment, saving, and public policy |
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| Authors: | Jie Zhang Junsen Zhang Michael C.M. Leung |
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| Affiliation: | Department of Economics, National University of Singapore; Department of Economics, Chinese University of Hong Kong; Department of Economics, Chinese University of Hong Kong |
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| Abstract: | Abstract. This paper develops an overlapping‐generations model in which agents invest in health to prolong life in both working and retirement periods. It explores how unfunded social security with or without health subsidies affects life expectancy, economic growth, and welfare. In particular, by extending life at a possible cost of capital accumulation, health subsidies and a pay‐as‐you‐go pension can improve welfare, especially in the short run. JEL classification: I12, J14, J18, O11 |
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