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. With suitably planned transfers between the two countries, allowing for migration may generate a Pareto-improvement for all current and future generations. Without transfers, either country may be unable to pay for promised benefits when labor becomes mobile. JEL Classification: H55, I2, F22

Wydatki w ramach zabezpieczenia społecznego jako inwestycja w kapitał ludzki w Polsce

“…Wśród nich nie docenia się jednak wydatków dokonywanych w ramach systemu zabezpieczenia społecznego. W literaturze przedmiotu rozważa się jedynie wpływ typu systemu emerytalnego (stanowiącego część systemu zabezpieczenia społecznego) na decyzje o inwestowaniu w kapitał ludzki (głównie edukację) [Pogue i Sgontz 1977;Lau i Poutvaara 2001;Echevarria i Iza 2006;Poutvaara 2007]. Brakuje jednak badań empirycznych (w szczególności dla Polski) w zakresie wpływu wydatków w ramach całego systemu zabezpieczenia społecznego na poziom kapitału ludzkiego.…”

The Governance of Migration Policy

“…Pay as you go pension systems create a further incentive for politicians to manipulate the timing and level of immigration (Scholten and Thum, 1996;Razin and Sadka, 1999;Poutvaara, 2005). Governments may choose to permit immigration of young workers, in order to smooth adjustment to demographic shocks, such as the aging of the baby boom generation (Auerbach and Oreopoulos, 1999;Storesletten, 2000).…”

Migration and Social Insurance

“…In Section 4.1 we characterize the tax competition among Bismarkian governments, in Section 4.2 between Beveridgean governments and in Section 4.3 we 1 Another line of research has dealt with the e¤ect of social insurance incentives on human capital investment. Poutvaara (2007) gets the result that labor mobility increases investments in human capital in the Beveridgean country but reduces that of migrants from Bismarkian towards the Beveridgean country.…”