erc/metu
INTERNATIONAL CONFERENCE IN ECONOMICS  IV
September 13-16, 2000, Ankara

A General Equilibrium Model of Social Security and On-the-Job-Training

Carmen Dolores Alvarez Albelo (Centre de Recerca en Economia del Benestar (CREB), Spain)

Abstract

The question whether to consider exogenous units of labor efficiency İstanbul Üniversitesi important for pay-as-you-go social security system issues has remained so far open. This paper answers this question by using a dynamic general equilibrium model with human capital accumulation through on the job training that is calibrated for the American economy. Two experiments are carried out: to remove the pay-as-you-go social security system and to gradually reduce the population growth rate. The findings show that the negative impact of the social security on the labor supply is quantitatively greater and that the human capital accumulation attenuates the drop in contributions provoked by the population aging. Moreover, the analysis confirms Mulligan (1998) result that the elasticity hours worked-wage is about 3\% under on job training.

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