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Design of a Social Security System: Pension System vs. Unemployment Insurance

Yusuke Kinai ()
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Yusuke Kinai: Graduate School of Economics, Osaka University

No 11-12, Discussion Papers in Economics and Business from Osaka University, Graduate School of Economics

Abstract: This paper presents consideration of how the social security system evolves as the attributes of voters change. In our setting, policy determination is based on majority voting. The government has two components of social security policy: a pension system and unemployment insurance. When workers constitute most voters, the pension system is supported and when unemployed people are the majority, unemployment insurance is adopted. Under this setting, employing the concept of structure-induced equilibrium developed by Shepsle (1979), the present paper describes how the contents of the social security system evolve depending on the dynamics of capital accumulation and the unemployment rate, and demonstrates the possibility that one or the other social security system ceases to exist in certain instances.

Keywords: Social Security; Pension System vs. Unemployment Insurance; Majority Voting; Structureinduced equilibrium. (search for similar items in EconPapers)
JEL-codes: E61 H53 H55 (search for similar items in EconPapers)
Pages: 26 pages
Date: 2011-03
New Economics Papers: this item is included in nep-age, nep-cdm, nep-ias and nep-mac
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