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

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  • Yusuke Kinai

    (Graduate School of Economics, Osaka University)

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.

Suggested Citation

  • Yusuke Kinai, 2011. "Design of a Social Security System: Pension System vs. Unemployment Insurance," Discussion Papers in Economics and Business 11-12, Osaka University, Graduate School of Economics.
    • Handle: RePEc:osk:wpaper:1112
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    References listed on IDEAS

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    More about this item

    Keywords

    Social Security; Pension System vs. Unemployment Insurance; Majority Voting; Structureinduced equilibrium.;
    All these keywords.

    JEL classification:

    • E61 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Policy Objectives; Policy Designs and Consistency; Policy Coordination
    • H53 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Welfare Programs
    • H55 - Public Economics - - National Government Expenditures and Related Policies - - - Social Security and Public Pensions

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