This paper shows that the design of education policy involves a potential conflict between welfare and social mobility. We consider a setting in which social mobility is maximized under the least elitist public education system, whereas welfare maximization calls for the most elitist system. We...

We consider a two-period model. In the first period, individuals consume two goods: one is sinful and the other is not. The sin good brings pleasure but has a detrimental effect on second period health and individuals tend to underestimate this effect. In the second period, individuals can...

This paper studies the design of a nonlinear social security scheme in a society where individuals differ in two respects: productivity and degree of myopia. Myopic individuals may not save enough" for their retirement because their myopic self" emerges when labor supply and savings decisions...

This paper shows that the combination of habit formation - present consumption creating additional consumption needs in the future - and myopia may explain why some retirees are forced to unretire, i.e., unexpectedly return to work. It also shows that when myopia about habit formation leads to...

Advantageous (or propitious) selection occurs when an increase in the premium of an insurance contract induces high-cost agents to quit, thereby reducing the average cost among remaining buyers. Hemenway (1990) and many subsequent contributions motivate its advent by differences in risk-aversion...

COVID-19 outbreaks at nursing homes during the recent pandemic, which received ample media coverage, may have lasting negative impacts on individuals' perceptions regarding nursing homes. We argue that this could have sizable and persistent implications for savings and long-term care policies....

Advantageous (or propitious) selection occurs when an increase in the premium of an insurance contract induces high-cost agents to quit, thereby reducing the average cost among remaining buyers. Hemenway (1990) and many subsequent contributions motivate its advent by differences in risk-aversion...

Marginal utility of financial resources when needing long-term care, and the related incentives for precautionary savings and insurance, may vary significantly by whether one receives care at home or in a nursing home. In this paper, we develop strategic survey questions to estimate those...

We study the political determination of the level of social long-term care insurance when voters also choose private insurance and saving amounts. Agents differ in income, probability of becoming dependent and of receiving family help. Social insurance redistributes across income and risk...

Marginal utility of financial resources when needing long-term care, and the related incentives for precautionary savings and insurance, may vary significantly by whether one receives care at home or in a nursing home. In this paper, we develop strategic survey questions to estimate those...