VID Colloquium
Improving The Sustainability of The Norwegian Public Pensions System through Education Reform:
A Study of The Impact of Timing and Duration of Schooling on Fertility and Human Capital and Variations in Productivity over The Life Cycle
Vegard Skirbekk, IIASA
Date: Fri. 12. Nov. 2004, Time: 13:00-14:00
We analyse the extent to which a reform lowering the school leaving age increases the sustainability of public pension systems. Graduating at a younger age shifts the timing of subsequent events in adulthood toward younger ages. Individuals enter the workforce earlier, initiate childbearing at a younger age and have more children. The school reform investigated lowers the school leaving age by two years, one by compressing compulsory schooling and another by lowering the entrance age. This is achieved with minimal losses to human capital: Swiss and Swedish evidence suggest that such variation in the length of schooling and in the school entrance age have negligible effects on adult productivity. Using a large scale, micro-based dynamic model for the Norwegian public pension system, MOSART, we find that the school reform can play a substantial role in increasing the sustainability of public pension systems.
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