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LONGEVITY VARIATIONS AND THE WELFARE STATE

Published online by Cambridge University Press:  13 May 2016

Pierre Pestieau  and
Gregory Ponthiere
Pierre Pestieau
Affiliation:
University of Liège, CORE, Belgium and Paris School of Economics, France
Gregory Ponthiere
Affiliation:
University Paris East (ERUDITE), Paris School of Economics and Institut universitaire de France (IUF), France. E-mail: gregory.ponthiere@ens.fr
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Abstract:

Life expectancy at birth has more than doubled in Europe since the early 19th century. This demographic trend constitutes a major victory against scarcity, but raises also deep challenges to the Welfare State, concerning the sustainability and the equity of the social protection system. This paper surveys recent developments in the economic analysis of longevity, both at the positive and the normative levels. Taking mortality risks into account is shown to affect the study of the life cycle model significantly, in particular concerning the strength of life horizon effects. It raises also, at the level of normative foundations for policy-making, a dilemma between ex ante and ex post valuations. Finally, we explore the design of policy reforms under varying longevity, in fields including preventive and curative policies, education, pension, and wealth taxation.

Keywords

longevitymortality riskinequalitieslife cycleWelfare StateJ10J18H55
Type
Research Papers
Information
Journal of Demographic Economics , Volume 82 , Issue 2 , June 2016 , pp. 207 - 239
Copyright
Copyright © Université catholique de Louvain 2016 

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