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Title:Why are more redistributive social security systems smaller? A median voter approach PDF Logo
Authors:Köthenbürger, Marko
Poutvaara, Panu
Profeta, Paola
Issue Date:2005
Series/Report no.:IZA Discussion Papers 1831
Abstract:We suggest a political economy explanation for the stylized fact that intragenerationally more redistributive social security systems are smaller. We relate the stylized fact to an efficiency-redistribution trade-off to be resolved by political process. The inefficiency of social security financing is due to endogenous labor supply. Using data on eight European countries, we find that the stylized fact and a considerable degree of cross-country variation in contribution rates can be explained by the median voter model.
Subjects:earnings-related and flat-rate benefits
applied political economy
public pensions
labour supply
JEL:H55
D72
Document Type:Working Paper
Appears in Collections:IZA Discussion Papers, Forschungsinstitut zur Zukunft der Arbeit (IZA)

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