A Static Model for Voting on Social Security

Henning Bohn ()

No CESifo Working Paper No. 2649, CESifo Working Paper Series from CESifo Group Munich

Abstract: This paper examines a static voting model for public pensions. The key premise is that families can internalize the cost and benefits of pay-as-you-go programs. A family realizes a net gain if its members collectively receive more in benefits in the current period than they pay in payroll taxes. Abstracting from differences in income, net benefits are positive if the family’s retiree-worker ratio exceeds the national average. If a sufficient fraction of retirees have a suitable number of working-age relatives—not too few and not too many—then a majority of voters belongs to families with above average retiree-worker ratios.

Keywords: social security; public pensions; voting model (search for similar items in EconPapers)
JEL-codes: H55 (search for similar items in EconPapers)
Date: 2009
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