Optimal Paternalistic Health-Human Capital Policies

Ano: 
2017
Co-autor: 
Marcelo Arbex
Resumo: 
We study optimal paternalistic policies when agents differ in their cognitive abilities and present bias. Cognitive skills involve conscious intellectual effort. In our model, they are associated with agent's ability to accumulate human capital at a low leisure cost. Present biased preferences might affect current decisions and their future consequences and outcomes. We characterize three policy packages that implement the fi rst-best (unbiased) social optimum, namely, policies proportional to (i) physical capital, health capital and human capital stocks, (ii) the consumption of unhealthy good, health care services and studying time, and (iii) the stock of physical capital and earnings. If type-speci c policies are not feasible, we also characterize (constrained) rst-best optimal paternalistic policies(a single policy package for all agents). We illustrate numerically the relevance of agents' skills for the determination of optimal policies.
Tipo: 
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HealthHumanPaternalistic_Sep05.pdf326.84 KB

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