Increased Pension Savings: Blessing or Curse? Social Security Reform in a Two-Sector Growth Model
This paper analyses the consequences of a switch to a more funded pension scheme for economic growth in an economy that consists of a capital-intensive commodity sector with endogenous growth and a labour-intensive services sector. The increased savings cause long-run growth to be higher in a closed economy, provided capital and labour are not strong substitutes. The reverse holds for a small open economy. More funding can therefore turn out to be a curse instead of a blessing for future generations, unless countries implement their reforms simultaneously or impose a tax on labour-intensive services. Copyright (c) The London School of Economics and Political Science 2006.
Year of publication: |
2007
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Authors: | GROEZEN, BAS VAN ; MEIJDAM, LEX ; VERBON, HARRIE A. A. |
Published in: |
Economica. - London School of Economics (LSE). - Vol. 74.2007, 296, p. 736-755
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Publisher: |
London School of Economics (LSE) |
Saved in:
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