On sustainable Pay-As-you-Go contribution rules

Gabrielle Demange

Post-Print from HAL

Abstract: An unfunded social security system faces the major risk, sometimes referred to as "political risk," that future generations do not agree to contribute as much as expected. In order to account properly for this risk, the paper considers a political process in which the support to the system is asked from each new born generation. The analysis is conducted in an overlapping generations economy that is subject to macroeconomic shocks. As a consequence, the political support varies with the evolution of the economy. The impact of various factors--intragenerational redistribution, risk aversion, financial markets, governmental debt--on the political sustainability of a pay-as-you-go system is discussed.

Keywords: pay-as-you-go; social security; risk; political economy; intra-generational redistribution; overlapping generations (search for similar items in EconPapers)
Date: 2009-08
References: Add references at CitEc
Citations: View citations in EconPapers (11)

Published in Journal of Public Economic Theory, 2009, 11 (4), pp.493-527. ⟨10.1111/j.1467-9779.2009.01419.x⟩

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

Related works:
Journal Article: On Sustainable Pay‐as‐You‐Go Contribution Rules (2009)
Working Paper: On sustainable Pay-As-you-Go contribution rules (2009)
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:hal:journl:halshs-00670876

DOI: 10.1111/j.1467-9779.2009.01419.x

Access Statistics for this paper

More papers in Post-Print from HAL
Bibliographic data for series maintained by CCSD ().