Differential effect of the pension system on education and income by life expectancy

Miguel Sanchez Romero, Vienna Institute of Demography and Austrian Academy of Sciences
Alexia Fürnkranz-Prskawetz, Vienna University of Technology

This paper investigates the differential impact that alternative pension systems have on the labor supply and the accumulation of physical and human capital for individuals that differ by their learning ability and levels of life expectancy. Our analysis is calibrated to the US economy using a general equilibrium model populated by overlapping generations, in which all population groups interact through the pension system, the labor market, and the capital market.