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A Static Model for Voting on Social Security

Author

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  • Henning Bohn

Abstract

This paper examines a static voting model for public pensions. The key premise is that families can internalize the cost and benefits of pay-as-you-go programs. A family realizes a net gain if its members collectively receive more in benefits in the current period than they pay in payroll taxes. Abstracting from differences in income, net benefits are positive if the family’s retiree-worker ratio exceeds the national average. If a sufficient fraction of retirees have a suitable number of working-age relatives—not too few and not too many—then a majority of voters belongs to families with above average retiree-worker ratios.

Suggested Citation

  • Henning Bohn, 2009. "A Static Model for Voting on Social Security," CESifo Working Paper Series 2649, CESifo.
    • Handle: RePEc:ces:ceswps:_2649
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    References listed on IDEAS

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    1. Guido Tabellini, 2000. "A Positive Theory of Social Security," Scandinavian Journal of Economics, Wiley Blackwell, vol. 102(3), pages 523-545, September.
    2. repec:bla:scandj:v:102:y:2000:i:3:p:523-45 is not listed on IDEAS
    3. Thomas F. Cooley & Jorge Soares, 1999. "A Positive Theory of Social Security Based on Reputation," Journal of Political Economy, University of Chicago Press, vol. 107(1), pages 135-160, February.
    4. Vincenzo Galasso, 2008. "The Political Future of Social Security in Aging Societies," MIT Press Books, The MIT Press, edition 1, volume 1, number 026257246x, December.
    5. Brooks,Robin & Razin,Assaf (ed.), 2005. "Social Security Reform," Cambridge Books, Cambridge University Press, number 9780521844956, January.
    6. Bohn, Henning, 1999. "Will social security and Medicare remain viable as the U.S. population is aging?," Carnegie-Rochester Conference Series on Public Policy, Elsevier, vol. 50(1), pages 1-53, June.
    7. Browning, Edgar K, 1975. "Why the Social Insurance Budget Is Too Large in a Democracy," Economic Inquiry, Western Economic Association International, vol. 13(3), pages 373-388, September.
    8. Friedrich Breyer & J.‐Matthias Graf V. D. Schulenburg**, 1987. "Voting on Social Security: The Family as Decision‐Making Unit," Kyklos, Wiley Blackwell, vol. 40(4), pages 529-547, November.
    9. repec:bla:kyklos:v:40:y:1987:i:4:p:529-47 is not listed on IDEAS
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    Cited by:

    1. Michael Funke & Marc Gronwald, 2009. "A Convex Hull Approach to Counterfactual Analysis of Trade Openness and Growth," CESifo Working Paper Series 2692, CESifo.

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    More about this item

    Keywords

    social security; public pensions; voting model;
    All these keywords.

    JEL classification:

    • H55 - Public Economics - - National Government Expenditures and Related Policies - - - Social Security and Public Pensions

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