Voiting on social security reform with heterogeneous agents
This paper analyzes the quantitative role of idiosyncratic uncertainty in an economy in which rational agents vote on hypothetical social security reforms. We construct an Overlapping Generations economy in which individuals face idiosuncratic risk with respect to their labor productivity and the labor-leisure decision is endogenous. We find that role of a pay-as-you-go social security system as a partial insurance device significantly reduces political support for a transition to an economy with a fully funded system. Also, smoother transitions have less political support than more rapid transitions. We conclude that the status quo bias in favor of an unfunded social security system is stronger in economies in which agents of similar age differ significantly with respect to labor earnings and wealth due to idiosyncratic uncertainty.
To our knowledge, this item is not available for
download. To find whether it is available, there are three
1. Check below under "Related research" whether another version of this item is available online.
2. Check on the provider's web page whether it is in fact available.
3. Perform a search for a similarly titled item that would be available.
|Date of creation:||1998|
|Date of revision:|
|Contact details of provider:|| Postal: Espai de Recerca en Economia, Facultat de CiÃ¨ncies EconÃ²miques. Tinent Coronel Valenzuela, Num 1-11 08034 Barcelona. Spain.|
Phone: +34 93 402 43 13cazza
Web page: http://www.ere.ub.es
More information through EDIRC
When requesting a correction, please mention this item's handle: RePEc:bar:bedcje:199836. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Espai de Recerca en Economia)
If references are entirely missing, you can add them using this form.