The Spirit of the Welfare State? Adaptation in the Demand for Social Insurance

Martin Ljunge

No 11-30, Discussion Papers from University of Copenhagen. Department of Economics

Abstract: Young generations demand substantially more social insurance than older generations, although program rules have been constant for decades. I postulate a model where the utility of taking up social insurance benefits depends on the past behavior of older generations. The model is estimated with individual panel data. The intertemporal mechanism estimated can account for half of the younger generations’ higher demand for social insurance benefits. The influence of older generations’ behavior remains when instrumenting using mortality rates, which makes a compelling case for a causal intertemporal influence on individual demand.

Keywords: social insurance; adaptation; role models (search for similar items in EconPapers)
JEL-codes: H31 I18 J22 Z13 (search for similar items in EconPapers)
Pages: 45 pages
Date: 2011-11-16
New Economics Papers: this item is included in nep-age and nep-ias
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Citations: View citations in EconPapers (4)

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Persistent link: https://EconPapers.repec.org/RePEc:kud:kuiedp:1130

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