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Social Security and Democracy

Author

Listed:
  • Mulligan Casey B

    (University of Chicago)

  • Gil Ricard

    (University of California, Santa Cruz)

  • Sala-i-Martin Xavier X

    (Columbia University)

Abstract

Using some new international data sets to produce both across-country econometric estimates as well as case studies of South American and southern European countries, we find that Social Security policies vary according to economic and demographic factors but that very different political histories can result in the same Social Security policy. We find weak partial correlation between democracy and the size of Social Security budgets, on how those budgets are allocated, or how economic and demographic factors affect Social Security. If there is any observed difference between democracies and non-democracies, it is that the former spend a little less of their GDP on Social Security, grow their budgets a bit more slowly, and cap their payroll tax more often, than do economically and demographically similar non-democracies. Democracies and non-democracies are equally likely to have benefit formulas inducing retirement and, conditional on GDP per capita, equally likely to induce retirement with a retirement test vs. an earnings test.

Suggested Citation

  • Mulligan Casey B & Gil Ricard & Sala-i-Martin Xavier X, 2010. "Social Security and Democracy," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 10(1), pages 1-46, March.
  • Handle: RePEc:bpj:bejeap:v:10:y:2010:i:1:n:18
    DOI: 10.2202/1935-1682.2428
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    More about this item

    JEL classification:

    • H0 - Public Economics - - General
    • H1 - Public Economics - - Structure and Scope of Government
    • 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

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