We propose a positive theory that is consistent with two important features of social security programs around the world: (1) they redistribute income from young to old and (2) they induce retirement. We construct a voting model that includes a political campaign' or debate' prior to the election. The model incorporates single-mindedness' of the groups that do not work: while the workers divide their political capital between their age concerns' and occupational concerns', the retired concentrate all their political capital to support their age group. In our model, the elderly end up getting transfers from the government (paid by the young) and distortionary labor income taxes induce the retirement of the elderly. In addition, our model predicts that occupational groups that work more will tend to have more political power. The opposite is true for non-occupational groups (such as the elderly). We provide some evidence that supports these additional predictions.
Download Info
To download:
If you experience problems downloading a file, check if you have the
proper application to
view it first. Information about this may be contained
in the File-Format links below. In case of further problems read
the IDEAS help
page. Note that these files are not on the IDEAS
site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
Publisher Info
Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number
9691.
Length: Date of creation: May 2003 Date of revision: Handle: RePEc:nbr:nberwo:9691
Note: AG PE Contact details of provider: Postal: National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A. Phone: 617-868-3900 Email: Web page: http://www.nber.org More information through EDIRC
For technical questions regarding this item, or to correct its listing, contact: ().
Find related papers by JEL classification: H55 - Public Economics - - National Government Expenditures and Related Policies - - - Social Security and Public Pensions D78 - Microeconomics - - Analysis of Collective Decision-Making - - - Positive Analysis of Policy-Making and Implementation
This paper has been announced in the following NEP Reports:
References listed on IDEAS Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
Michele Boldrin & Sergi Jimenez-Martin & Franco Peracchi, 1999.
"Social Security and Retirement in Spain,"
NBER Chapters,
in: Social Security and Retirement around the World, pages 305-353
National Bureau of Economic Research, Inc.
[Downloadable!]
Didier Blanchet & Louis-Paul Pele, 1999.
"Social Security and Retirement in France,"
NBER Chapters,
in: Social Security and Retirement around the World, pages 101-133
National Bureau of Economic Research, Inc.
[Downloadable!]
Other versions:
Pierre Pestieau & Jean-Philippe Stijns, 1999.
"Social Security and Retirement in Belgium,"
NBER Chapters,
in: Social Security and Retirement around the World, pages 37-71
National Bureau of Economic Research, Inc.
[Downloadable!]
Axel Borsch-Supan & Reinhold Schnabel, 1999.
"Social Security and Retirement in Germany,"
NBER Chapters,
in: Social Security and Retirement around the World, pages 135-180
National Bureau of Economic Research, Inc.
[Downloadable!]
Other versions:
Cited by: (explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)