Growth effects of an unfunded social security system when there is altruism and human capital

We investigate the relationship between growth and an unfunded social security system in an overlapping generations model with joy-of-giving altruism where endogenous growth is driven by the accumulation of human capital. We show that an unfunded social security system financed with a tax on labor income can increase growth. (C) 2000 Elsevier Science S.A. All rights reserved.