Empirical evidence suggests that parents who have themselves inherited from their own parents are more likely to leave an estate to their children even after controlling for income, wealth and education. This implies an indirect reciprocal behavior between three generations by transmitting the attitude towards bequeathing from one generation to the next. We incorporate such an intergenerational...

In this paper we identify a number of objectionable features of the German retirement benefit formula. We show that groups of insureds with higher than average life expectancy, in particular high-income groups, are subsidized by the rest of the membership because the formula neglects differences in group-specific life expectancy. Furthermore, the current formula leads to undesirable long-run ef...

In order to get a more complete picture of how labor supply is affected by economic incentives, the effects on absenteeism and not just on contracted hours should be taken into account. In particular, absenteeism due to sick leave can be considerable. In this paper we examine whether the level of sick leave compensation affects sick leave behavior. Using time-series data for Sweden spanning a l...

Social Security Incentives, Human Capital Investment and Mobility of Labor Migration between countries with earnings-related and flat-rate pay-as-you-go social security systems may change human capital investments in both countries. The possibility of emigration boosts investments in human capital in the country with flat-rate benefits. Correspondingly, those expecting to migrate from the count...

The public debt stock in some economically developed countries continues to increase because of a lack of tax revenues and the concomitant burdens of social security. Many of those countries suffer from lower birth rates and consequently, have fewer children. Child allowances might be an effective way to increase fertility, leading to higher future tax revenues through an increase in the number...

This study examines income mobility amongst older people in Great Britain and Germany after retirement. The motivation is that older people may be subject to greater income risks in today’s environment of early exits from the labour force, rising longevity and increasing reliance on private pension income. Our results provide evidence that income mobility amongst older people is more pronounced...

Sickness absence tends to be negatively correlated with unemployment. This may suggest disciplining effects of unemployment but may also reflect changes in the composition of the labour force. A panel of Norwegian register data for the years 1990-1995 is used to analyse sickness absences lasting more than two weeks. We estimate fixed effects models of the probability of absence and the number o...

The current OASI program redistributes resource from high wage workers to low wage workers and from two-earner couples to one-earner couples. Due to computational difficulty, however, most previous literature on the dynamic general equilibrium analyses of Social Security assumes “unisex” individuals and does not consider the redistribution between one-earner and two-earner households. In the pr...

We analyze the interaction between risk sharing and capital accumulation in a stochastic OLG model with production. We give a complete characterization of interim Pareto optimality. Our characterization also subsumes equilibria with a PAYG social security system. In a competitive equilibrium interim Pareto optimality is equivalent to intergenerational exchange e¢ciency, which in turn implies dy...

The paper compares the well-being of the baby boom generation (ages 40–55) in 2001 with the same age group in 1983. I find little evidence that their relative position deteriorated over the period. By some indicators, this generation has seen an improvement. In terms of income, the 40–55 age group was at about the same relative position in 2001 as in 1983. In terms of conventional wealth, there...