Political economy and pensions in ageing societies – a note on how an ”impossible” reform was implemented in Sweden
AbstractAgeing puts a strain on most countries’ pension systems; forecasts show them to be more or less unsustainable. Evidence from social choice research, theoretical as well as empirical, does not seem to offer a way out of the dilemma, as the median voter will resist a reform. Despite this, Sweden has implemented a major reform, supposedly making the system sustainable. The question in this paper is thus: how was it possible to launch such a reform in Sweden? The analysis is based on majority voting models. Important explanatory factors are age structure as well as the age of the median voter; both of these go against the probability of a reform. A focus on age structure in combination with transitional rules and specific features of the reform may provide an explanation.
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Bibliographic InfoPaper provided by Lund University, Department of Economics in its series Working Papers with number 2005:35.
Length: 16 pages
Date of creation: 07 Jun 2005
Date of revision:
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Postal: Department of Economics, School of Economics and Management, Lund University, Box 7082, S-220 07 Lund,Sweden
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More information through EDIRC
political economy; pension reform; median voter; age structure;
Find related papers by JEL classification:
- D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
- H55 - Public Economics - - National Government Expenditures and Related Policies - - - Social Security and Public Pensions
- J26 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Retirement; Retirement Policies
This paper has been announced in the following NEP Reports:
- NEP-ALL-2005-06-27 (All new papers)
- NEP-DCM-2005-06-27 (Discrete Choice Models)
- NEP-EEC-2005-06-27 (European Economics)
- NEP-PBE-2005-06-27 (Public Economics)
- NEP-POL-2005-06-27 (Positive Political Economics)
- NEP-PUB-2005-06-27 (Public Finance)
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