Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/18126 
Authors: 
Year of Publication: 
2003
Series/Report no.: 
DIW Discussion Papers No. 369
Publisher: 
Deutsches Institut für Wirtschaftsforschung (DIW), Berlin
Abstract: 
The paper presents a model where public pensions are determined by majority voting. Voters differ by age and income. Moreover, life expectancy increases with income. Depending on the strength of the link between contributions and benefits, and the relationship between income and life expectancy, individually optimal tax rates may increase or decrease with income. If they decrease, high tax rates are supported by pensioners and poor workers. If they increase with income, the coalition for high tax rates consists of pensioners and rich workers. 'Ends against the middle' equilibria are also possible.
Subjects: 
Voting
public pensions
life expectancy
JEL: 
H55
D72
Document Type: 
Working Paper

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