Social Security, Retirement, and the Single-Mindedness of the Electorate / Casey B. Mulligan, Xavier Sala-i-Martin.

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Mulligan, Casey B

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Material type: Text

TextSeries: Working Paper Series (National Bureau of Economic Research) ; no. w9691.Publication details: Cambridge, Mass. National Bureau of Economic Research 2003.Description: 1 online resource: illustrations (black and white)Subject(s):

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Abstract: 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.

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Item type	Home library	Collection	Call number	Status	Date due	Barcode	Item holds
Working Paper	Biblioteca Digital	Colección NBER	nber w9691 (Browse shelf(Opens below))	Not For Loan

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May 2003.

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.