Alternative Social Security Systems andGrowth

Demographic trends in most developed economies are characterized by rising longevity and decreasing birthrates. These trends endanger the sustainability of the current public pension systems. Therefore social security reform proposals are on the agenda in many countries. This paper demonstrates that the analysis of fiscal sustainability of social security must include an additional dimension of public policy, namely education funding. Indeed, the productivity growth of future workers, which depends on human capital accumulation, may outweigh the impact of the demographic problem. This fact is true under both pay-as-you-go (PAYG) and fully funded (FF) social security system. We consider an OLG economy where government, in addition to running social security, also funds education of future workers by means of taxes collected from the current ones. The education tax rates are chosen, in each period, by a majoritarian rule among the relevant constituents. We demonstrate that while the FF system results in relatively higher rates of physical capital accumulation, then under some conditions, other things equal, the PAYG social security regime leads to the choice of relatively higher respective levels of education tax rates in all generations, and thereby to higher rates of human capital accumulation.social security, funding, growth, human capital

Geometrical Origin of Fermion Families in SU(2)xU(1) Gauge Theory

A spontaneously broken SU(2)xU(1) gauge theory with just one "primordial" generation of fermions is formulated in the context of generally covariant theory which contains two measures of integration in the action: the standard \sqrt{-g}d^{4}x and a new \Phi d^{4}x, where \Phi is a density built out of degrees of freedom independent of the metric. Such type of models are known to produce a satisfactory answer to the cosmological constant problem. Global scale invariance is implemented. After SSB of scale invariance and gauge symmetry it is found that with the conditions appropriate to laboratory particle physics experiments, to each primordial fermion field corresponds three physical fermionic states. Two of them correspond to particles with constant masses and they are identified with the first two generations of the electro-weak theory. The third fermionic states at the classical level get non-polynomial interactions which indicate the existence of fermionic condensate and fermionic mass generation.Comment: LATEX, 8 pages; misprint correcte