IDEAS home Printed from https://ideas.repec.org/p/cor/louvco/1996061.html
   My bibliography  Save this paper

Social insurance and labor mobility : a political economy approach

Author

Listed:
  • CREMER, Helmuth

    (IDEI and GREMAQ, Université de Toulouse)

  • PESTIEAU, Pierre

    () (CREPP, Université de Liège and Center for Operations Research and Econometrics (CORE), Université catholique de Louvain (UCL), Louvain la Neuve, Belgium)

Abstract

This paper presents a political economy approach to payroll tax competition between countries adopting different systems of social insurance. It considers two such systems: the Bismarckian one where benefits are partially linked to payroll taxes and the Beveridgean one where benefits are fiat. A third system, referred to as private, with no redistributive feature (and relying on the concept of actuarial fairness) is also considered. Our main objective is to assess the relative robustness of Bismarckian and Beveridgean social insurance systems in various symmetric and asymmetric set- tings. Quite surprisingly, the common belief that the Bismarckian system is more tax-competition proof turns out to be wrong in a number of cases. The fundamental instability of a Beveridgean system nevertheless appears when the social insurance system itself (and not just the level of protection) is chosen in a strategic way at some prior (constitutional) stage. It may then be a dominant strategy for all countries to adopt a Bismarckian system even when the Beveridgean system is less affected by tax competition. In other wordsl the choice of social insurance systems resemble a prisoners dilemma type game.

Suggested Citation

  • CREMER, Helmuth & PESTIEAU, Pierre, 1996. "Social insurance and labor mobility : a political economy approach," CORE Discussion Papers 1996061, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
  • Handle: RePEc:cor:louvco:1996061
    as

    Download full text from publisher

    File URL: https://uclouvain.be/en/research-institutes/immaq/core/dp-1996.html
    Download Restriction: no

    References listed on IDEAS

    as
    1. Léopold Simar & Paul W. Wilson, 1998. "Sensitivity Analysis of Efficiency Scores: How to Bootstrap in Nonparametric Frontier Models," Management Science, INFORMS, vol. 44(1), pages 49-61, January.
    2. Caves, Douglas W & Christensen, Laurits R & Diewert, W Erwin, 1982. "The Economic Theory of Index Numbers and the Measurement of Input, Output, and Productivity," Econometrica, Econometric Society, vol. 50(6), pages 1393-1414, November.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Alain Jousten & Pierre Pestieau, 2002. "Labor Mobility, Redistribution, and Pension Reform in Europe," NBER Chapters,in: Social Security Pension Reform in Europe, pages 85-108 National Bureau of Economic Research, Inc.
    2. Cremer, Helmuth & Pestieau, Pierre, 2003. "Social insurance competition between Bismarck and Beveridge," Journal of Urban Economics, Elsevier, vol. 54(1), pages 181-196, July.
    3. Pestieau, Pierre, 1996. "Politique sociale, redistribution et intégration économique," L'Actualité Economique, Société Canadienne de Science Economique, vol. 72(3), pages 275-289, septembre.

    More about this item

    Keywords

    political economy; social insurance; fiscal competition;

    JEL classification:

    • H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
    • H73 - Public Economics - - State and Local Government; Intergovernmental Relations - - - Interjurisdictional Differentials and Their Effects
    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:cor:louvco:1996061. 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: (Alain GILLIS). General contact details of provider: http://edirc.repec.org/data/coreebe.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.