Social Security in Theory and Practice (I): Facts and Political Theories

Casey Mulligan and Xavier Sala-i-Martin

No 7118, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: 166 countries have some kind of public old age pension. What economic forces create and sustain old age Social Security as a public program? We document some of the internationally and historically common features of Social Security programs including explicit and implicit taxes on labor supply, pay-as-you-go features, intergenerational redistribution, benefits which are increasing functions of lifetime earnings and not means-tested. We partition theories of Social Security into three groups: political', efficiency' and narrative' theories. We explore three political theories in this paper: the majority rational voting model (with its two versions: the elderly as the leaders of a winning coalition with the poor' and the once and for all election' model), the time-intensive model of political competition' and the taxpayer protection model'. Each of the explanations is compared with the international and historical facts. A companion paper explores the efficiency' and narrative' theories and derives implications of all the theories for replacing the typical pay-as-you-go system with a forced savings plan.

JEL-codes: H55 D78 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-cdm, nep-his, nep-lab, nep-mic, nep-pbe and nep-pub
Date: 1999-05
Note: AG PE
View list of references View citations in EconPapers

Downloads: (external link)
http://www.nber.org/papers/w7118.pdf (application/pdf)
Access to the full text is generally limited to series subscribers, however if the top level domain of the client browser is in a developing country or transition economy free access is provided. More information about subscriptions and free access is available at http://www.nber.org/wwphelp.html.

Related works:
Working Paper: Social Security in Theory and Practice (I): Facts and Political Theories (1999)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: http://EconPapers.repec.org/RePEc:nbr:nberwo:7118

Ordering information: This working paper can be ordered from
http://www.nber.org/papers/w7118
The price is Paper copy available by mail.

Access Statistics for this paper

More papers in NBER Working Papers from National Bureau of Economic Research, Inc
Address: National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.
Contact information at EDIRC.
Series data maintained by ().