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When the State Mirrors the Family: The Design of Pension Systems

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  • Vincenzo Galasso
  • Paola Profeta

Abstract

We study how family culture has affected the adoption and generosity of public pension systems. Our theoretical framework suggests that inheritance rules shape filial obligations to parents, and thus the within-family intergenerational transmission of resources. In countries with egalitarian inheritance rules, inheriting children represent a large share of the population, and support generous pension systems; in countries with nonegalitarian inheritance rules, a majority of noninheriting individuals prefer basic pension systems. An empirical cross-country analyses using historical data on inheritance rules support these predictions. These results are robust to controlling for alternative legal, religious, demographic, economic, and political explanations. Evidence from individual (General Social Survey) data confirms our findings: US citizens whose ancestors came from countries featuring egalitarian inheritance rules rely more on the government as a provider of old age security income.

Suggested Citation

  • Vincenzo Galasso & Paola Profeta, 2018. "When the State Mirrors the Family: The Design of Pension Systems," Journal of the European Economic Association, European Economic Association, vol. 16(6), pages 1712-1763.
  • Handle: RePEc:oup:jeurec:v:16:y:2018:i:6:p:1712-1763.
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    Cited by:

    1. Maria Kravtsova & Aleksey Oshchepkov & Christian Welzel, 2018. "The Shadow Of The Family: Historical Roots Of Social Capital In Europe," HSE Working papers WP BRP 82/SOC/2018, National Research University Higher School of Economics.
    2. repec:eee:poleco:v:49:y:2017:i:c:p:24-46 is not listed on IDEAS
    3. Bertocchi, Graziella & Bozzano, Monica, 2016. "Women, medieval commerce, and the education gender gap," Journal of Comparative Economics, Elsevier, vol. 44(3), pages 496-521.
    4. Luca Crivelli & Paola Salari, 2012. "Fiscal federalism and income redistribution through healthcare financing: An empirical analysis for the Swiss cantons," CEPRA working paper 1204, USI Università della Svizzera italiana.
    5. Vincenzo Galasso & Paola Profeta, 2013. "From Family Culture to Welfare State Design," CHILD Working Papers Series 14, Centre for Household, Income, Labour and Demographic Economics (CHILD) - CCA.
    6. Graziella Bertocchi & Monica Bozzano, 2016. "Origins and implications of family structure across Italian provinces in historical perspective," Department of Economics 0095, University of Modena and Reggio E., Faculty of Economics "Marco Biagi".
    7. repec:eee:jcecon:v:46:y:2018:i:2:p:457-479 is not listed on IDEAS
    8. Graziella Bertocchi & Monica Bozzano, 2015. "Family Structure and the Education Gender Gap: Evidence from Italian Provinces," CESifo Economic Studies, CESifo, vol. 61(1), pages 263-300.
    9. repec:eee:eecrev:v:100:y:2017:i:c:p:236-256 is not listed on IDEAS
    10. Alesina, Alberto & Giuliano, Paola, 2014. "Family Ties," Handbook of Economic Growth,in: Handbook of Economic Growth, edition 1, volume 2, chapter 4, pages 177-215 Elsevier.
    11. repec:hrv:faseco:34330186 is not listed on IDEAS
    12. Elsayyad, May & Konrad, Kai A., 2012. "Fighting multiple tax havens," Journal of International Economics, Elsevier, vol. 86(2), pages 295-305.
    13. Bozzano, Monica, 2017. "On the historical roots of women's empowerment across Italian provinces: religion or family culture?," European Journal of Political Economy, Elsevier, vol. 49(C), pages 24-46.
    14. A. Alesina & P. Giuliano., 2016. "Culture and Institutions," VOPROSY ECONOMIKI, N.P. Redaktsiya zhurnala "Voprosy Economiki", vol. 11.
    15. Bertocchi, Graziella & Bozzano, Monica, 2016. "Origins and implications of family structure across Italian provinces in historical perspective," CEPR Discussion Papers 11617, C.E.P.R. Discussion Papers.
    16. Alberto Alesina & Yann Algan & Pierre Cahuc & Paola Giuliano, 2015. "Family Values And The Regulation Of Labor," Journal of the European Economic Association, European Economic Association, vol. 13(4), pages 599-630, August.
    17. Barnett, Richard & Bhattacharya, Joydeep & Puhakka, Mikko, 2012. "Private Versus Public Old-Age Security," School of Economics Working Paper Series 2012-14, LeBow College of Business, Drexel University.
    18. Ang, James B. & Fredriksson, Per G., 2017. "Wheat agriculture and family ties," European Economic Review, Elsevier, vol. 100(C), pages 236-256.
    19. repec:spr:jopoec:v:32:y:2019:i:2:d:10.1007_s00148-018-0686-z is not listed on IDEAS
    20. repec:taf:jdevst:v:52:y:2016:i:6:p:813-823 is not listed on IDEAS
    21. repec:mod:depeco:0007 is not listed on IDEAS
    22. repec:hig:wpaper:82/soc/2017 is not listed on IDEAS
    23. Mahsa Akbari & Duman Bahrami-Rad & Erik O. Kimbrough, 2017. "Kinship, Fractionalization and Corruption," Discussion Papers dp17-17, Department of Economics, Simon Fraser University.
    24. repec:spr:jopoec:v:31:y:2018:i:3:d:10.1007_s00148-017-0681-9 is not listed on IDEAS

    More about this item

    JEL classification:

    • H10 - Public Economics - - Structure and Scope of Government - - - General
    • H55 - Public Economics - - National Government Expenditures and Related Policies - - - Social Security and Public Pensions
    • N30 - Economic History - - Labor and Consumers, Demography, Education, Health, Welfare, Income, Wealth, Religion, and Philanthropy - - - General, International, or Comparative
    • Z10 - Other Special Topics - - Cultural Economics - - - General
    • Z13 - Other Special Topics - - Cultural Economics - - - Economic Sociology; Economic Anthropology; Language; Social and Economic Stratification

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