The Political Economy of Social Security under Differential Longevity and Voluntary Retirement

Marie-Louise Leroux

Journal of Public Economic Theory, 2010, vol. 12, issue 1, 151-170

Abstract: This paper studies a model where the existence of a pension system is decided by majority voting. We assume that individuals have the same income but different longevity. Retirement is voluntary and the pension system is characterised by a payroll tax on earnings and a flat pension benefit. Individuals vote only on the tax level. We show that a pension system emerges when there is a majority of long‐lived individuals and that voluntary retirement enables to lower the size of the transfers received by the long‐lived. A rise in average longevity will also increase the size of the pension system.

Date: 2010
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https://doi.org/10.1111/j.1467-9779.2009.01451.x

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Working Paper: The political economy of social security under differential longevity and voluntary retirement (2010)
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Persistent link: https://EconPapers.repec.org/RePEc:bla:jpbect:v:12:y:2010:i:1:p:151-170

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