social security, intertemporal choice, human capital
JEL:
H55,
D91,
E24
Abstract:
In many European countries, due to population aging, the switch from
conventional unfunded public pension systems to notional systems character-
ized by individual accounts is in debate. In this article, we develop an OLG
model in which endogenous growth is based on an accumulation of knowledge
driven by the proportion of skilled workers and the time they have spent to
be trained. In such a framework, we show that conventional pension systems,
contrary to notional systems, can enhance economic growth by linking bene-
ts only to partial earnings history. Thus, considering economic growth, the
optimal adjustment to aging could consist in increasing the size of existing
retirement systems rather than switching to notional systems.
