Voting on Pensions: A Survey

Walque, Grégory de

doi:10.2139/ssrn.1691476

Cited by 20 publications

(5 citation statements)

References 70 publications

Supporting

Mentioning

Contrasting

Order By: Relevance

“…Starting with the first, that is, the political economy literature on pension systems, we note that the overwhelming majority focus on the old‐age security systems of developed countries (for an exception see Jung and Tran (2012)). This very large body of literature addresses the question of why there is electoral support for a redistributive system in which the contributors outnumber the recipients and where contributors probably have superior savings options available (for excellent surveys see Breyer (1994), Galasso and Profeta (), or De Walque ()). Two more recent contributions address the rise of social security systems in less‐developed countries but on different grounds as compared to our study.…”

Section: Empirical Motivation and Literature Reviewmentioning

confidence: 99%

Redistributive pensions in the developing world

Kemmerling

Neugart

2019

Review Development Economics

View full text Add to dashboard Cite

Redistributive so‐called social pension schemes have seen a remarkable surge in developing countries. These schemes often target the rural elderly and correlate with urbanization rates, urban rural‐wage differentials, and family norms. We use this stylized evidence to motivate a political economy model for a Beveridgean pension system with trade‐offs between four groups: the (poorer) rural old and young, and the (richer) urban old and young. We show under which conditions governments will install a pension system and increase its generosity as the share of the urban population rises, productivity differentials between urban and rural workers widen, or the social norm erodes. Our conclusion is that the role of the rural–urban divide in shaping redistribution merits more scholarly attention, as the gap between cities and the countryside widens in many developing countries.

show abstract

Section: Empirical Motivation and Literature Reviewmentioning

confidence: 99%

Redistributive pensions in the developing world

Kemmerling

Neugart

2019

Review Development Economics

View full text Add to dashboard Cite

show abstract

“…This can be viewed as an extension of existing surveys devoted to the political economy of pensions in which retirement age is given. For example, de Walque (2005) presents an overview of the literature designed to explain the size and the type of pay‐as‐you‐go pension systems. He is particularly interested by the effect of aging on the generosity of the systems.…”

Section: Linear Pension Schemementioning

confidence: 99%

Social Security and Retirement Decision: A Positive and Normative Approach*

Cremer

Lozachmeur

2007

Journal of Economic Surveys

View full text Add to dashboard Cite

Social insurance for the elderly is judged responsible for the widely observed trend towards early retirement. In a world of laissez-faire or in a firstbest setting, there would be no such trend. However, when first-best instruments are not available, because health and productivity are not observable, the optimal social insurance policy may imply a distortion on the retirement decision. The main point we make is that while there is no doubt that retirement systems induce an excessive bias towards early retirement in many countries, a complete elimination of this bias (i.e. a switch to an actuarially fair system) is not the right answer for two reasons. First, some distortions are second-best optimal. This is the normative argument. Second, and on the positive side, the elimination of the bias might be problematic from a political perspective. Depending on the political process, either it may not be feasible or alternatively it may tend to undermine the political support for the pension system itself.

show abstract

“…This literature typically refers to social security as a pay-as-you-go (PAYG) transfer from current workers to the retired. The findings in this literature have been synthesized in different review studies (Galasso and Profeta 2002, de Walque 2005, Mulligan and Sala-i Martin 2015 that conclude that PAYG social security can be a politically stable arrangement. This typically relies on the assumption that if a working generation refuses to pay its transfer, it will not receive a transfer from the next working generation once it is old, causing the arrangement to be permanently dismantled.…”

Section: Introductionmentioning

confidence: 99%

The Political (In)stability of Funded Pension Systems

et al. 2020

View full text Add to dashboard Cite

We analyze the political stability of capital funded social security. In particular, using a stylized theoretical framework we study the mechanisms behind governments capturing pension assets in order to lower current taxes. This is followed by an analysis of the analogous mechanisms in a fully-fledged overlapping generations model with intra-cohort heterogeneity. Funding is efficient in a Kaldor-Hicks sense. Individuals vote on capturing the accumulated pension assets and replacing the funded pension pillar with a pay-as-you-go scheme. We show that even if capturing assets reduces welfare in the long run, it always has sufficient political support from those alive at the moment of the vote.

show abstract

Voting on Pensions: A Survey

Cited by 20 publications

References 70 publications

Redistributive pensions in the developing world

Redistributive pensions in the developing world

Social Security and Retirement Decision: A Positive and Normative Approach*

The Political (In)stability of Funded Pension Systems

Contact Info

Product

Resources

About