Occupational Risks, Social Insurance and Investments in Education

Journal of Population Economics, Vol. 13, Issue 3, 2000

Posted: 13 Jul 2001

See all articles by Dan Anderberg

Dan Anderberg

University of London, Royal Holloway College - Department of Economics; CESifo (Center for Economic Studies and Ifo Institute)

Abstract

A link between social insurance and education policy is explored. Due to moral hazard full insurance against disability is not feasible. When high- and low-risk individuals can be identified, second-best social insurance system entails cross-subsidies from the low-risk group to the high-risk group. Implementation of this second-best insurance, however, distorts the human capital investment decisions when education qualifies for a low risk job. Therefore, the second-best social insurance together with an education subsidy is a welfare improving policy. An education policy also has the role of establishing dynamic consistency of the government's policy.

Keywords: Disability pensions, time consistency, education policy

JEL Classification: H21, H42, I28

Suggested Citation

Anderberg, Dan, Occupational Risks, Social Insurance and Investments in Education. Journal of Population Economics, Vol. 13, Issue 3, 2000, Available at SSRN: https://ssrn.com/abstract=241937

Dan Anderberg (Contact Author)

University of London, Royal Holloway College - Department of Economics ( email )

Royal Holloway College
Egham
Surrey, Surrey TW20 0EX
United Kingdom

CESifo (Center for Economic Studies and Ifo Institute)

Poschinger Str. 5
Munich, DE-81679
Germany

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