Political economy and pensions in ageing societies – a note on how an ”impossible” reform was implemented in Sweden

Agneta Kruse ()
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Agneta Kruse: Department of Economics, Lund University, Postal: Department of Economics, School of Economics and Management, Lund University, Box 7082, S-220 07 Lund, Sweden, http://www.nek.lu.se/en/contact

No 2005:35, Working Papers from Lund University, Department of Economics

Abstract: Ageing puts a strain on most countries’ pension systems; forecasts show them to be more or less unsustainable. Evidence from social choice research, theoretical as well as empirical, does not seem to offer a way out of the dilemma, as the median voter will resist a reform. Despite this, Sweden has implemented a major reform, supposedly making the system sustainable. The question in this paper is thus: how was it possible to launch such a reform in Sweden? The analysis is based on majority voting models. Important explanatory factors are age structure as well as the age of the median voter; both of these go against the probability of a reform. A focus on age structure in combination with transitional rules and specific features of the reform may provide an explanation.

Keywords: political economy; pension reform; median voter; age structure (search for similar items in EconPapers)
JEL-codes: D72 H55 J26 (search for similar items in EconPapers)
Pages: 16 pages
Date: 2005-06-07
New Economics Papers: this item is included in nep-dcm, nep-eec, nep-pbe, nep-pol and nep-pub
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Persistent link: https://EconPapers.repec.org/RePEc:hhs:lunewp:2005_035

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