Throughout Europe today, the problems of employment and the prospects of pronounced demographic ageing combine to raise a number of questions on the future of pensions and on the underlying principles of redistribution between generations. Everywhere a new debate has arisen on intergenerational...

In this paper we investigate the impact of a reduction in the pension replacement rate on the schooling choice and on inequality. We develop an overlapping generations model in which individuals differ by their life expectancy and in the cost of attending schooling. Individuals optimally choose...

As the heterogeneity in life expectancy by socioeconomic status increases, pension systemsbecome more regressive implying wealth transfers from short to long lived individuals. Variouspension reforms aim to reduce these inequalities that are caused by ex-ante differences in lifeexpectancy....