The emergence of redistributive pensions in the developing world

Michael Neugart and Achim Kemmerling

VfS Annual Conference 2015 (Muenster): Economic Development - Theory and Policy from Verein für Socialpolitik / German Economic Association

Abstract: Pension schemes that redistribute money to the elderly have seen a remarkable surge in developing countries. To explain this phenomenon we build a political economy model of a Beveridgean pay-as-you-go social security system which incorporates family transfers driven by costs of non-compliance to a social norm. For appropriately chosen weights of a political support function a government will choose to increase pensions if the share of the urban population increases, productivity differentials between urban and rural workers widen, or if the social norm erodes.

JEL-codes: D72 H55 O18 (search for similar items in EconPapers)
Date: 2015
New Economics Papers: this item is included in nep-age
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:vfsc15:112884

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