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On the Political Economy of Social Security and Public Education

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Author Info
Panu Poutvaara ()

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Abstract

This paper proposes and analyzes a model of a "European economy" with three overlapping generations, redistributive social security, and public universities without tuition. Individuals differ ex ante. The effect of wage tax rate on occupational choice and the voting equilibrium of wage tax rate and educational investments are analyzed both under full certainty and with income risks facing the educated and the uneducated.

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Publisher Info
Paper provided by CESifo Group Munich in its series CESifo Working Paper Series with number CESifo Working Paper No. 424.

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Date of creation: 2001
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Handle: RePEc:ces:ceswps:_424

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Related research
Keywords: Education; social security; redistributive taxation; occupational choice;

Other versions of this item:

Find related papers by JEL classification:
D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Models of Political Processes: Rent-seeking, Elections, Legislatures, and Voting Behavior
H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
H52 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Education
H55 - Public Economics - - National Government Expenditures and Related Policies - - - Social Security and Public Pensions
I21 - Health, Education, and Welfare - - Education - - - Analysis of Education

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

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  2. Creedy, John & Francois, Patrick, 1990. "Financing higher education and majority voting," Journal of Public Economics, Elsevier, vol. 43(2), pages 181-200, November. [Downloadable!] (restricted)
  3. Kai A. Konrad, 1999. "Privacy, time consistent optimal labor income taxation and education policy," IZA Discussion Papers 82, Institute for the Study of Labor (IZA). [Downloadable!]
    Other versions:
  4. Casamatta, Georges & Cremer, Helmuth & Pestieau, Pierre, 2000. "The Political Economy of Social Security," CESifo Working Paper Series CESifo Working Paper No. , CESifo Group Munich. [Downloadable!]
    Other versions:
  5. 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)
  6. Hassler, John & Krusell, Per & Storesletten, Kjetil & Zilibotti, Fabrizio, 2005. "The dynamics of government," Journal of Monetary Economics, Elsevier, vol. 52(7), pages 1331-1358, October. [Downloadable!] (restricted)
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  10. Fernandez, Raquel & Rogerson, Richard, 1995. "On the Political Economy of Education Subsidies," Review of Economic Studies, Blackwell Publishing, vol. 62(2), pages 249-62, April. [Downloadable!] (restricted)
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  11. Kanbur, S. M., 1981. "Risk taking and taxation : An alternative perspective," Journal of Public Economics, Elsevier, vol. 15(2), pages 163-184, April. [Downloadable!] (restricted)
  12. Douglas Holtz-Eakin & Mary E. Lovely & Mehmet Serkan Tosun, 2000. "Generational Conflict, Human Capital Accumulation, and Economic Growth," Center for Policy Research Working Papers 28, Center for Policy Research, Maxwell School, Syracuse University. [Downloadable!]
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  13. John Hassler & José V. Rodríguez Mora & Kjetil Storesletten & Fabrizio Zilibotti, 2001. "The Survival of the Welfare State," Economics Working Papers 603, Department of Economics and Business, Universitat Pompeu Fabra. [Downloadable!]
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  14. Nielsen, Soren Bo & Sorensen, Peter Birch, 1997. "On the optimality of the Nordic system of dual income taxation," Journal of Public Economics, Elsevier, vol. 63(3), pages 311-329, February. [Downloadable!] (restricted)
  15. Boadway, Robin & Marchand, Maurice & Pestieau, Pierre, 1991. "Optimal linear income taxation in models with occupational choice," Journal of Public Economics, Elsevier, vol. 46(2), pages 133-162, November. [Downloadable!] (restricted)
  16. Glomm, Gerhard & Ravikumar, B, 1992. "Public versus Private Investment in Human Capital Endogenous Growth and Income Inequality," Journal of Political Economy, University of Chicago Press, vol. 100(4), pages 813-34, August.
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  18. Johnson, George E, 1984. "Subsidies for Higher Education," Journal of Labor Economics, University of Chicago Press, vol. 2(3), pages 303-18, July. [Downloadable!] (restricted)
  19. Konrad, Kai A, 1995. "Social Security and Strategic Inter-vivos Transfers of Social Capital," Journal of Population Economics, Springer, vol. 8(3), pages 315-26, August.
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  25. Judd, Kenneth L, 1998. "Taxes, Uncertainty, and Human Capital," American Economic Review, American Economic Association, vol. 88(2), pages 289-92, May. [Downloadable!] (restricted)
  26. Boadway, Robin W & Wildasin, David E, 1989. "A Median Voter Model of Social Security," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 30(2), pages 307-28, May. [Downloadable!] (restricted)
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  27. Antonio Rangel & Richard Zeckhauser, 1999. "Can Market and Voting Institutions Generate Optimal Intergenerational Risk Sharing?," Working Papers 99003, Stanford University, Department of Economics. [Downloadable!]
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  28. Becker, Gary S & Murphy, Kevin M, 1988. "The Family and the State," Journal of Law & Economics, University of Chicago Press, vol. 31(1), pages 1-18, April.
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  29. Eaton, Jonathan & Rosen, Harvey S, 1980. "Taxation, Human Capital, and Uncertainty," American Economic Review, American Economic Association, vol. 70(4), pages 705-15, September. [Downloadable!] (restricted)
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  30. Levhari, David & Weiss, Yoram, 1974. "The Effect of Risk on the Investment in Human Capital," American Economic Review, American Economic Association, vol. 64(6), pages 950-63, December. [Downloadable!] (restricted)
  31. Kaganovich, Michael & Zilcha, Itzhak, 1999. "Education, social security, and growth," Journal of Public Economics, Elsevier, vol. 71(2), pages 289-309, February. [Downloadable!] (restricted)
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  32. Hamilton, Jonathan H, 1987. "Optimal Wage and Income Taxation with Wage Uncertainty," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 28(2), pages 373-88, June. [Downloadable!] (restricted)
  33. Sinn, Hans-Werner, 1995. " A Theory of the Welfare State," Scandinavian Journal of Economics, Blackwell Publishing, vol. 97(4), pages 495-526, December.
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  34. Michele Boldrin & Aldo Rustichini, 2000. "Political Equilibria with Social Security," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 3(1), pages 41-78, January. [Downloadable!] (restricted)
  35. J. Ignacio Conde-Ruiz & Vincenzo Galasso, . "Early retirement," Working Papers 2003-03, FEDEA. [Downloadable!]
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  36. Kotlikoff, Laurence J & Persson, Torsten & Svensson, Lars E O, 1988. "Social Contracts as Assets: A Possible Solution to the Time-Consistency Problem," American Economic Review, American Economic Association, vol. 78(4), pages 662-77, September. [Downloadable!] (restricted)
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  38. Boadway, Robin & Marceau, Nicolas & Marchand, Maurice, 1996. "Investment in Education and the Time Inconsistency of Redistributive Tax Policy," Economica, London School of Economics and Political Science, vol. 63(250), pages 171-89, May. [Downloadable!] (restricted)
  39. Antonio Rangel, 1999. "Forward and Backward Intergenerational Goods: A Theory of Intergenerational Exchange," Working Papers 00001, Stanford University, Department of Economics. [Downloadable!]
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  40. Diamond, Peter A & Mirrlees, James A, 1986. " Payroll-Tax Financed Social Insurance with Variable Retirement," Scandinavian Journal of Economics, Blackwell Publishing, vol. 88(1), pages 25-50.
  41. Alexander Kemnitz, 2000. "Social security, public education, and growth in a representative democracy," Journal of Population Economics, Springer, vol. 13(3), pages 443-462. [Downloadable!] (restricted)
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Full references

Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Michael Kaganovich & Volker Meier, 2008. "Social Security Systems, Human Capital, and Growth in a Small Open Economy," CESifo Working Paper Series CESifo Working Paper No. , CESifo Group Munich. [Downloadable!]
  2. Michael Kaganovich & Itzhak Zilcha, 2008. "Alternative Social Security Systems and Growth," CESifo Working Paper Series CESifo Working Paper No. , CESifo Group Munich. [Downloadable!]
  3. Sita Nataraj Slavov, 2001. "Age Bias in Fiscal Policy: Why Does the Political Process Favor the Elderly?," Occidental Economics Working Papers 1, Occidental College, Department of Economics, revised Jan 2006. [Downloadable!]
    Other versions:
  4. Marko Köthenbürger & Panu Poutvaara & Paola Profeta, 2005. "Why are More Redistributive Social Security Systems Smaller? A Median Voter Approach," CESifo Working Paper Series CESifo Working Paper No. , CESifo Group Munich. [Downloadable!]
    Other versions:
  5. Alison Booth & Facundo Sepulveda, 2007. "Endogenous Fertility Policy And Unfunded Pensions," CAMA Working Papers 2007-06, Australian National University, Centre for Applied Macroeconomic Analysis. [Downloadable!]
  6. Mehmet S. Tosun, 2005. "Global Aging and Fiscal Policy with International Labor Mobility: A Political Economy Perspective," IMF Working Papers 05/140, International Monetary Fund. [Downloadable!]
    Other versions:
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