Fair Accumulation under Risky Lifetime

Abstract : Individuals save for their old days, but not all of them enjoy the old age. This paper characterizes the optimal capital accumulation in a two-period OLG model where lifetime is risky and varies across individuals. We compare two long-run social optima: (1) the average utilitarian optimum, where steady-state average welfare is maximized; (2) the egalitarian optimum, where the welfare of the worst-o¤ at the steady-state is maximized. It is shown that, under plausible conditions, the egalitarian optimum involves a higher capital and a lower fertility than the utilitarian optimum. Those inequalities hold also in a second-best framework where survival conditions are exogenously linked to the capital level.
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Pré-publication, Document de travail
PSE Working Papers n°2012-39. 2012


https://halshs.archives-ouvertes.fr/halshs-00746913
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Soumis le : mardi 30 octobre 2012 - 09:15:42
Dernière modification le : jeudi 12 février 2015 - 01:02:14

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Grégory Ponthière. Fair Accumulation under Risky Lifetime. PSE Working Papers n°2012-39. 2012. <halshs-00746913>

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