Resumen de Education, Life Expectancy and Pension Reform

Tim Krieger, Thomas Langer

• In a two-period model with agent heterogeneity we analyze a pension reform toward a stronger link between contributions and benefits (as recently observed in several countries) in a pension system with a Bismarckian and a Beveridgean component. We show that such a policy change may discourage human capital investment at the margin and thus reduce the average educational level in an economy.

  The life expectancy differential between skilled and unskilled individuals drives this result. Furthermore, we investigate the consequences on the intragenerational redistribution characteristics of the pension system �in the sense of the number of net-recipients relative to net-payers� as well as welfare effects.