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Pré-Publication, Document De Travail Année : 2012

Fair Accumulation under Risky Lifetime

Résumé

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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Dates et versions

halshs-00746913 , version 1 (30-10-2012)

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  • HAL Id : halshs-00746913 , version 1

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Grégory Ponthière. Fair Accumulation under Risky Lifetime. 2012. ⟨halshs-00746913⟩
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