The Stability and Growth Pact as an Impediment to Privatizing Social Security

Assaf Razin and Efraim Sadka

No 9278, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: The aging of the population shakes the confidence in the economic viability of pay-as-you-go social security systems. We demonstrate how in a political-economy framework the shaken cofidence leads to the downsizing of the social security-system, and to the emergence of supplemental individual retirement programs. Lifting the Stability-Pact type ceiling on fiscal deficits is shown to facilitate the transition from a national to a private pension system, through an endogenously determined shift in the median voter.

JEL-codes: H0 (search for similar items in EconPapers)
Date: 2002-10
Note: PE
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Citations: View citations in EconPapers (17)

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Working Paper: The Stability and Growth Pact as an Impediment to Privatizing Social Security (2002)
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