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The Birth and Growth of the Social Insurance State: Explaining Old Age and Medical Insurance Across Countries

  • David M. Cutler
  • Richard Johnson

    ()

We examine the factors leading to creation and growth of national Old-Age Insurance (OAI) and Health Insurance schemes. None of the theories we test fit the data very well. There is weak evidence that the probability of adopting a system declines in a country's wealth and in the ethnic heterogeneity of its population. Catholic countries are more likely to create earnings-related OAI systems. The growth of OAI spending since 1960 has varied considerably across countries, with fast growth in countries emerging from dictatorship and non-English speaking countries. We conclude that social insurance can be politically expedient for many different reasons.

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Article provided by Springer in its journal Public Choice.

Volume (Year): 120 (2004)
Issue (Month): 1_2 (07)
Pages: 87-121

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Handle: RePEc:kap:pubcho:v:120:y:2004:i:1_2:p:87-121
Contact details of provider: Web page: http://www.springerlink.com/link.asp?id=100332

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  1. Alberto Alesina & Reza Baqir & William Easterly, 1999. "Public Goods And Ethnic Divisions," The Quarterly Journal of Economics, MIT Press, vol. 114(4), pages 1243-1284, November.
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  8. Roubini, Nouriel & Sachs, Jeffrey D., 1989. "Political and economic determinants of budget deficits in the industrial democracies," European Economic Review, Elsevier, vol. 33(5), pages 903-933, May.
  9. Easterly, W & Levine, R, 1996. "Africa's Growth Tragedy : Policies and Ethnic Divisions," Papers 536, Harvard - Institute for International Development.
  10. Jeffrey A. Miron & David N. Weil, 1997. "The Genesis and Evolution of Social Security," NBER Working Papers 5949, National Bureau of Economic Research, Inc.
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