A Static Model for Voting on Social Security

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A Static Model for Voting on Social Security

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Henning Bohn ()

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Henning Bohn

Abstract

This paper examines a static voting model for public pensions. The key premise is that families can internalize the cost and benefits of pay-as-you-go programs. A family realizes a net gain if its members collectively receive more in benefits in the current period than they pay in payroll taxes. Abstracting from differences in income, net benefits are positive if the family’s retiree-worker ratio exceeds the national average. If a sufficient fraction of retirees have a suitable number of working-age relatives—not too few and not too many—then a majority of voters belongs to families with above average retiree-worker ratios.

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Paper provided by CESifo Group Munich in its series CESifo Working Paper Series with number CESifo Working Paper No. 2649.

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Date of creation: 2009
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Handle: RePEc:ces:ceswps:_2649

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Find related papers by JEL classification:
H55 - Public Economics - - National Government Expenditures and Related Policies - - - Social Security and Public Pensions

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Thomas F. Cooley & Jorge Soares, 1999. "A Positive Theory of Social Security Based on Reputation," Journal of Political Economy, University of Chicago Press, vol. 107(1), pages 135-160, February. [Downloadable!] (restricted)
Bohn, Henning, 1999. "Will social security and Medicare remain viable as the U.S. population is aging?," Carnegie-Rochester Conference Series on Public Policy, Elsevier, vol. 50(1), pages 1-53, June. [Downloadable!] (restricted)
Other versions:
- Henning Bohn, . "Will Social Security and Medicare Remain Viable as the U.S. Population is Aging?," University of California at Santa Barbara, Economics Working Paper Series 5-98, Department of Economics, UC Santa Barbara.

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