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Social security incentives and human capital investment.

By M.I. Lau and P. Poutvaara


While the effect of social security systems on retirement decisions has received much\ud attention, there are no analytical results on the impact of these systems on individual\ud incentives to invest in human capital. We integrate human capital investment and\ud retirement decisions in an analytical life-cycle model with full certainty and investigate\ud how different social security schemes may affect human capital investment\ud and labor supply. We analyze and compare three different social security systems,\ud differing on whether benefits are conditional on withdrawal from the labor market\ud and on previous income

Publisher: Finnish Economic Association
Year: 2006
OAI identifier:

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