The political economy of social security

Georges Casamatta (), Helmuth Cremer and Pierre Pestieau

No 1999055, LIDAM Discussion Papers CORE from Université catholique de Louvain, Center for Operations Research and Econometrics (CORE)

Abstract: We consider a two-period overlapping generations model in which individual voters differ not only according to age but also productivity. In such a setting, a (redistributive) Pay-As-You-Go system is politically sustainable, even when the interest rate is larger than the rate of population growth. The medium wages workers (not the lowest) join the retirees to form a majority and vote for a positive level of social security. This level depends on the difference between population growth and interest rate and on the redistributiveness of the benefit rule.

Keywords: social security; majority voting (search for similar items in EconPapers)
JEL-codes: H55 O41 (search for similar items in EconPapers)
Date: 1999-09-01
References: Add references at CitEc
Citations: View citations in EconPapers (8)

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Related works:
Journal Article: The Political Economy of Social Security (2000)
Working Paper: The Political Economy of Social Security (2000)
Working Paper: The political economy of social security (2000)
Working Paper: The Political Economy of Social Security (2000)
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Persistent link: https://EconPapers.repec.org/RePEc:cor:louvco:1999055

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