Capital-skill Complementarity and the Redistributive E ff ects of Social Security Reform

  title={Capital-skill Complementarity and the Redistributive E ff ects of Social Security Reform},
  author={ALESSANDRA CASARICO and Carlo Devillanova},
This paper analyses the general equilibrium implications of reforming pay-as-yougo pension systems in an economy with heterogeneous agents, human capital investment and capital-skill complementarity. It shows that increasing funding delivers in the long run higher physical and human capital and therefore higher output, but also higher wage and income inequality. The latter affects preferences over the degree of redistribution of the remaining pay-as-you-go component: despite the greater role… CONTINUE READING

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