In this paper we explore the consequences for optimality of a social planner adopting two different welfare criteria. The framework of analysis is an OLG model with physical and human capital. We first show that, when the SWF is a discounted sum of individual utilities defined over consumption...

Although the optimal policy under endogenous fertility has been widely studied, the optimal public intervention under endogenous childbearing age has remained largely unexplored. This paper examines the optimal family policy in a context where the number and the timing of births are chosen by...

We study the optimal design of a social security system when individuals differ in health status and occupation. Health status is private information but is imperfectly correlated with occupation: individuals in harsh occupations are more likely to be in poor health. We explore the desirability...

One of the greatest success stories in our societies is that people are living longer, life expectancy at birth being now above 80 years. Whereas the lengthening of life opens huge opportunities for individuals if extra years are spent in prosperity and good health, it is however often regarded...

This paper shows that the combination of habit formation – present consumption creating additional consumption needs in the future – and myopia may explain why some retirees are forced to "unretire", i.e., unexpectedly return to work. It also shows that when myopia about habit formation...

This paper studies the normative problem of redistribution among individuals who can influence their longevity through a non-monetary effort but have different taste for effort. As benchmarks, we first present the laissez-faire and the first best. In the first best, the level of effort is always...

It is well known that, in OLG economies with life-cycle saving and exogenous growth, competitive equilibria will in general fail to achieve optimality and may even be dynamically inefficient. This is a consequence of individuals accumulating amounts of physical capital that differ from the level...

Social insurance for the elderly is judged responsible for the widely observed trend towards early retirement. In a world of laissez-faire or in a first-best setting, there would be no such trend. However, when first-best instruments are not available, because health and productivity are not...

This paper studies the optimal linear tax-transfer policy in an economy where agents differ in productivity and in genetic background, and where longevity depends on health spending and genes. It is shown that, if agents internalize imperfectly the impact of genes and health spending on...

The achievements and limitations of the classical theory of optimal labor-income taxation based on social welfare functions are now well known, although utilitarianism still dominates public economics. We review the recent interest that has arisen for broadening the normative approach and making...