Political economy of social security with endogenous preferences
AbstractIn this paper we study the interaction between economic policy and preferences when both are endogenous. Economic policy results from a vote, whereas individual preferences are influenced by specific investment in training and education. The paper focuses on a particular economic policy: the financing of the social security system. Moreover, it considers a specific education investment: parents expect a gift from their children when old and devote resources in order to arouse the altruism of their children. Therefore, preferences of the children are trained in relation to the size of the social security system, which in turn results from the preferences of the median voter. The politico-equilibrium of this economy is compared to the social optimum.
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Bibliographic InfoPaper provided by HAL in its series Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) with number halshs-00185268.
Date of creation: Jul 2007
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Publication status: Published - Presented, Public Economic Theory, 2007, Nashville, United States
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social security; endogenous altruism.;
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