Political (In)Stability of Social Security Reform

Krzysztof Makarski and Joanna Tyrowicz

No 2015-21, Working Papers from Faculty of Economic Sciences, University of Warsaw

Abstract: In this paper we consider an economy populated by overlapping generations, who vote on abolishing the funded system and replacing it with the pay-as-you-go scheme (i.e. unprivatizing the pension system). We compare politically stable and politically unstable reforms and show that even if the funded system is overall welfare enhancing, the cohort distribution of benefits along the transition path turns unprivatizing social security politically favorable.

Keywords: pension system reform; time inconsistency; welfare (search for similar items in EconPapers)
JEL-codes: C68 D72 E17 E27 H55 (search for similar items in EconPapers)
Pages: 26 pages
Date: 2015
New Economics Papers: this item is included in nep-age, nep-dge, nep-mac, nep-pol and nep-pub
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http://www.wne.uw.edu.pl/index.php/download_file/1788/ First version, 2015 (application/pdf)

Related works:
Working Paper: Political (in)stability of social security reform (2017)
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Persistent link: https://EconPapers.repec.org/RePEc:war:wpaper:2015-21

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