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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
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    Cited by:

    1. Philippe Aghion & Alberto Alesina & Francesco Trebbi, 2004. "Endogenous Political Institutions," The Quarterly Journal of Economics, Oxford University Press, vol. 119(2), pages 565-611.
    2. TokeS. Aidt & Martin Daunton & Jayasri Dutta, 2010. "The Retrenchment Hypothesis and the Extension of the Franchise in England and Wales," Economic Journal, Royal Economic Society, vol. 120(547), pages 990-1020, September.
    3. Ahrens, Joachim & Schweickert, Rainer & Zenker, Juliane, 2011. "Varieties of capitalism, governance and government spending: A cross-section analysis," PFH Forschungspapiere/Research Papers 2011/01, PFH Private University of Applied Sciences, Göttingen.
    4. Perotti, Enrico & Schwienbacher, Armin, 2009. "The political origin of pension funding," Journal of Financial Intermediation, Elsevier, vol. 18(3), pages 384-404, July.
    5. Shelton, Cameron A., 2008. "The aging population and the size of the welfare state: Is there a puzzle?," Journal of Public Economics, Elsevier, vol. 92(3-4), pages 647-651, April.
    6. Ben-Bassat, Avi & Dahan, Momi, 2008. "Social rights in the constitution and in practice," Journal of Comparative Economics, Elsevier, vol. 36(1), pages 103-119, March.
    7. Emmanuel Saez & Manos Matsaganis & Panos Tsakloglou, 2012. "Earnings Determination and Taxes: Evidence From a Cohort-Based Payroll Tax Reform in Greece," The Quarterly Journal of Economics, Oxford University Press, vol. 127(1), pages 493-533.
    8. Luc Laeven, 2004. "The Political Economy of Deposit Insurance," Journal of Financial Services Research, Springer;Western Finance Association, vol. 26(3), pages 201-224, December.
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    11. Mulligan, Casey B. & Tsui, Kevin K., 2015. "Political entry, public policies, and the economy," Research in Economics, Elsevier, vol. 69(3), pages 377-397.
    12. repec:eee:jeborg:v:137:y:2017:i:c:p:145-159 is not listed on IDEAS
    13. Shelton, Cameron A., 2007. "The size and composition of government expenditure," Journal of Public Economics, Elsevier, vol. 91(11-12), pages 2230-2260, December.
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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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