What Social Security: Beveridgean or Bismarckian?

J. Ignacio Conde-Ruiz and Paola Profeta

No 2003-16, Working Papers from FEDEA

Abstract: Bismarckian social security systems are associated with larger public pension expenditures, a smaller fraction of private pension and lower income inequality than Beveridgean systems. This paper introduces a bidimensional voting model to account for all these features. Agents differ in age, income and in their ability to invest in the capital market. The voting game determines the degree of redistribution of the social security system -Bismarckian or Beveridgean- and the size of the transfer (for the low-income retirees). In an economy with three income groups, a small Beveridgean system is supported by low-income agents, who gain from its redistributive feature, and high-income individuals, who seek to minimize their tax contribution and to invest their resources in a private scheme. Middle- income individuals favor a large earning-related (Bismarckian) system. Hence, large (small) inequality is associated with a small Beveridgean (large Bismarckian) system and a large (small) private system.

References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (6)

Downloads: (external link)
https://documentos.fedea.net/pubs/dt/2003/dt-2003-16.pdf (application/pdf)

Related works:
Working Paper: What Social Security: Beveridgean or Bismarckian? (2004)
Working Paper: What social security: Beveridgean or Bismarckian? (2002)
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: https://EconPapers.repec.org/RePEc:fda:fdaddt:2003-16

Access Statistics for this paper

More papers in Working Papers from FEDEA
Bibliographic data for series maintained by Carmen Arias ().