Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/33420 
Year of Publication: 
2005
Series/Report no.: 
IZA Discussion Papers No. 1831
Publisher: 
Institute for the Study of Labor (IZA), Bonn
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

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