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The emergence of redistributive pensions in the developing world

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  • Neugart, Michael
  • Kemmerling, Achim

Abstract

Pension schemes that redistribute money to the elderly have seen a remarkable surge in developing countries. To explain this phenomenon we build a political economy model of a Beveridgean pay-as-you-go social security system which incorporates family transfers driven by costs of non-compliance to a social norm. For appropriately chosen weights of a political support function a government will choose to increase pensions if the share of the urban population increases, productivity differentials between urban and rural workers widen, or if the social norm erodes.

Suggested Citation

  • Neugart, Michael & Kemmerling, Achim, 2015. "The emergence of redistributive pensions in the developing world," VfS Annual Conference 2015 (Muenster): Economic Development - Theory and Policy 112884, Verein für Socialpolitik / German Economic Association.
    • Handle: RePEc:zbw:vfsc15:112884
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    More about this item

    JEL classification:

    • H55 - Public Economics - - National Government Expenditures and Related Policies - - - Social Security and Public Pensions
    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • O18 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Urban, Rural, Regional, and Transportation Analysis; Housing; Infrastructure

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