PUBLICATIONS:
This paper analyses the effect of a pay-as-you-go pension system on the evolution of capital and pollution, and on the efficiency of an environmental versus health policy. In an overlapping generations model (OLG), we introduce endogenous longevity that depends on pollution and health expenditures. Global dynamics may display multiple balanced growth paths (BGP). We show that by discouraging savings, a policy that promotes the pension system enlarges the environmental poverty trap. More surprisingly, the environmental policy has contrasted effects according to the significance of the pension system. If it has a low size, a raise of the environmental policy enlarges the environmental poverty trap and leads to a rise in capital over pollution at the highest stationary equilibrium. In contrast, in economies where intergenerational solidarity is well developed, capital over pollution decreases at the highest BGP. In such a case, the environmental policy does not necessarily lead to a better longevity and growth.
WORKS IN PROGRESS:
Despite the unprecedented improvements in health outcomes such as life expectancy in last decades, it remains huge disparities in terms of longevity across and within countries. This paper investigates whether the environmental policy could help to reduce such inequalities. To do so, we introduce heterogeneous agents in an overlapping generations model with pollution and private/public health expenditures that affect the agents’ length-of-life. Heterogeneity stems from the social background that affects households preferences through an incompressible consumption of non-health goods that differs across social categories. Therefore, since healthcare is viewed as a superior good for some and as a normal good for others, households do not devote the same share of their income to private health spending as incomes rise. This generates health inequalities. We find that the environmental policy can be helpful to sort out this issue as it may enhance the growth rate and lessen life expectancy discrepancies around the highest steady state.
Efficiency analyses have been widely used in the literature to rank countries regarding their health system performance. However, little place has been given to the environmental aspect in that literature. Therefore, two countries with the same characteristics could experience completely different healthcare system outcomes just because they do not have the same level of pollution, which is a major determinant of inhabitants' health. This paper analyses the effect of the environmental quality on the OECD countries' health system outcome, measured by the life expectancy at birth. Using a stochastic frontier model, we show that the longevity league table of OECD countries changes significantly whether the environmental index is taken into account or not. This, once again, underlines the critical importance of the environment when addressing health issues.