Social Security in Theory and Practice (I): Facts and Political Theories / Casey B. Mulligan, Xavier Sala-i-Martin.

Format:

Book

Author/Creator:

Mulligan, Casey B.

Contributor:

National Bureau of Economic Research.

Sala-i-Martin, Xavier.

Series:

Working Paper Series (National Bureau of Economic Research) no. w7118.

NBER working paper series no. w7118

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Other Title:

Social Security in Theory and Practice

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 1999.

Summary:

166 countries have some kind of public old age pension. What economic forces create and sustain old age Social Security as a public program? We document some of the internationally and historically common features of Social Security programs including explicit and implicit taxes on labor supply, pay-as-you-go features, intergenerational redistribution, benefits which are increasing functions of lifetime earnings and not means-tested. We partition theories of Social Security into three groups: political', efficiency' and narrative' theories. We explore three political theories in this paper: the majority rational voting model (with its two versions: the elderly as the leaders of a winning coalition with the poor' and the once and for all election' model), the time-intensive model of political competition' and the taxpayer protection model'. Each of the explanations is compared with the international and historical facts. A companion paper explores the efficiency' and narrative' theories and derives implications of all the theories for replacing the typical pay-as-you-go system with a forced savings plan.

Notes:

Print version record

May 1999.