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How retirement, health benefits and longevity affect household savings ?

El Mekkaoui de Freitas, Najat; Oliveira Martins, Joaquim (2011-01), How retirement, health benefits and longevity affect household savings ?. https://basepub.dauphine.fr/handle/123456789/9826

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Type
Document de travail / Working paper
Date
2011-01
Publisher
Université Paris-Dauphine
Series title
Cahiers de la Chaire les Particuliers Face aux Risques
Series number
n°53
Published in
Paris
Pages
26
Metadata
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Author(s)
El Mekkaoui de Freitas, Najat
Oliveira Martins, Joaquim
Abstract (EN)
This paper analyses the impact of welfare systems and longevity on savings. It develops a life-cycle model embodying social transfers (health care and pension expenditures) and changes in longevity to determine the level of household savings. We simulated an aggregate saving equation and derived a reduced-form model, together with other factors such as public deficits and the population structure. The model is estimated for a panel of 18 OECD countries. Our principal result is that both pension and health transfers may have a significant negative impact on the household saving. Therefore these interactions should be taken account when designing welfare reforms.
Subjects / Keywords
Ageing; Consumption; Health; Longevity; Pension systems; Saving
JEL
C68 - Computable General Equilibrium Models
D91 - Intertemporal Household Choice; Life Cycle Models and Saving
G10 - General
J11 - Demographic Trends, Macroeconomic Effects, and Forecasts
J26 - Retirement; Retirement Policies