Social Security Incentives, Human Capital Investment and Mobility of Labor

Panu Poutvaara

doi:10.1016/j.jpubeco.2007.03.001

Social Security Incentives, Human Capital Investment and Mobility of Labor

Panu Poutvaara

University of Helsinki

Research output: Contribution to journal › Journal article › Research › peer-review

Abstract

Migration between countries with earnings-related and flat-rate pay-as-you-go social security systems may change human capital investments in both countries. The possibility of emigration boosts investments in human capital in the country with flat-rate benefits. Correspondingly, those expecting to migrate from the country with earnings-related benefits to a country with flat-rate benefits may reduce their investment in education. Allowing for migration may generate an intertemporal Pareto-improvement with cross-border transfers, and the contribution rates satisfying certain conditions. However, these conditions are not satisfied with those contribution rates that would arise if the governments maximize the welfare of their citizens without migration.

Original language	English
Journal	Journal of Public Economics
Volume	91
Issue number	7-8
Pages (from-to)	1299-1325
Number of pages	26
ISSN	0047-2727
DOIs	https://doi.org/10.1016/j.jpubeco.2007.03.001
Publication status	Published - Aug 2007

Keywords

Social security
Education
Migration
Earnings-related and flat-rate pensions

UN SDGs

This output contributes to the following UN Sustainable Development Goals (SDGs)

Access to Document

10.1016/j.jpubeco.2007.03.001Licence: Unspecified

Handle.net

Persistent link

Cite this

@article{ce480960aaf111dc9bb5000ea68e967b,

title = "Social Security Incentives, Human Capital Investment and Mobility of Labor",

abstract = "Migration between countries with earnings-related and flat-rate pay-as-you-go social security systems may change human capital investments in both countries. The possibility of emigration boosts investments in human capital in the country with flat-rate benefits. Correspondingly, those expecting to migrate from the country with earnings-related benefits to a country with flat-rate benefits may reduce their investment in education. Allowing for migration may generate an intertemporal Pareto-improvement with cross-border transfers, and the contribution rates satisfying certain conditions. However, these conditions are not satisfied with those contribution rates that would arise if the governments maximize the welfare of their citizens without migration.",

keywords = "Social security, Education, Migration, Earnings-related and flat-rate pensions, Social security, Education, Migration, Earnings-related and flat-rate pensions",

author = "Panu Poutvaara",

year = "2007",

month = aug,

doi = "10.1016/j.jpubeco.2007.03.001",

language = "English",

volume = "91",

pages = "1299--1325",

journal = "Journal of Public Economics",

issn = "0047-2727",

publisher = "Elsevier",

number = "7-8",

}

TY - JOUR

T1 - Social Security Incentives, Human Capital Investment and Mobility of Labor

AU - Poutvaara, Panu

PY - 2007/8

Y1 - 2007/8

N2 - Migration between countries with earnings-related and flat-rate pay-as-you-go social security systems may change human capital investments in both countries. The possibility of emigration boosts investments in human capital in the country with flat-rate benefits. Correspondingly, those expecting to migrate from the country with earnings-related benefits to a country with flat-rate benefits may reduce their investment in education. Allowing for migration may generate an intertemporal Pareto-improvement with cross-border transfers, and the contribution rates satisfying certain conditions. However, these conditions are not satisfied with those contribution rates that would arise if the governments maximize the welfare of their citizens without migration.

AB - Migration between countries with earnings-related and flat-rate pay-as-you-go social security systems may change human capital investments in both countries. The possibility of emigration boosts investments in human capital in the country with flat-rate benefits. Correspondingly, those expecting to migrate from the country with earnings-related benefits to a country with flat-rate benefits may reduce their investment in education. Allowing for migration may generate an intertemporal Pareto-improvement with cross-border transfers, and the contribution rates satisfying certain conditions. However, these conditions are not satisfied with those contribution rates that would arise if the governments maximize the welfare of their citizens without migration.

KW - Social security

KW - Education

KW - Migration

KW - Earnings-related and flat-rate pensions

KW - Social security

KW - Education

KW - Migration

KW - Earnings-related and flat-rate pensions

U2 - 10.1016/j.jpubeco.2007.03.001

DO - 10.1016/j.jpubeco.2007.03.001

M3 - Journal article

SN - 0047-2727

VL - 91

SP - 1299

EP - 1325

JO - Journal of Public Economics

JF - Journal of Public Economics

IS - 7-8

ER -