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Is there a political support for the double burden on prolonged activity?

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  • CASAMATTA, Georges
  • CREMER, Helmuth
  • PESTIEAU, Pierre

Abstract

In many countries elderly workers are subject to a double distortion when they consider prolonging their activity: the payroll tax and a reduction in their pension rights. It is often argued that such a double burden would not be socially desirable. We consider a setting where it would be rejected by both a utilitarian and a Rawlsian social planner. Furthermore, each individual would also reject it as a citizen candidate. We show that the double burden may nevertheless be (second-best) Pareto efficient and can be supported by a particular structure of social weights biased towards the more productive workers.
(This abstract was borrowed from another version of this item.)
(This abstract was borrowed from another version of this item.)

Suggested Citation

  • CASAMATTA, Georges & CREMER, Helmuth & PESTIEAU, Pierre, 2006. "Is there a political support for the double burden on prolonged activity?," CORE Discussion Papers RP 1865, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
  • Handle: RePEc:cor:louvrp:1865
    Note: In : Economics of Governance, 7, 143-154, 2006.
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    File URL: http://dx.doi.org/10.1007/s10101-005-0001-9
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    References listed on IDEAS

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    1. Conde-Ruiz, J. Ignacio & Galasso, Vincenzo, 2004. "The macroeconomics of early retirement," Journal of Public Economics, Elsevier, vol. 88(9-10), pages 1849-1869, August.
    2. Assar Lindbeck & Jörgen Weibull, 1987. "Balanced-budget redistribution as the outcome of political competition," Public Choice, Springer, vol. 52(3), pages 273-297, January.
    3. Michele Boldrin & Juan J. Dolado & Juan F. Jimeno & Franco Peracchi, 1999. "The future of pensions in Europe," Economic Policy, CEPR;CES;MSH, vol. 14(29), pages 287-320, October.
    4. Paola Profeta, 2002. "Retirement and Social Security in a Probabilistic Voting Model," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 9(4), pages 331-348, August.
    5. Coughlin, Peter & Nitzan, Shmuel, 1981. "Electoral outcomes with probabilistic voting and Nash social welfare maxima," Journal of Public Economics, Elsevier, vol. 15(1), pages 113-121, February.
    6. J. Ignacio Conde-Ruiz & Vincenzo Galasso, 2003. "Early Retirement," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 6(1), pages 12-36, January.
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    Cited by:

    1. Marie-Louise Leroux, 2010. "The Political Economy of Social Security under Differential Longevity and Voluntary Retirement," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 12(1), pages 151-170, February.
    2. Helmuth Cremer & Jean-Marie Lozachmeur & Pierre Pestieau, 2008. "Social Security And Retirement Decision: A Positive And Normative Approach ," Journal of Economic Surveys, Wiley Blackwell, vol. 22(2), pages 213-233, April.
    3. Ryo Arawatari & Tetsuo Ono, 2010. "Retirement and Social Security: A Political Economy Perspective," Discussion Papers in Economics and Business 10-04-Rev, Osaka University, Graduate School of Economics and Osaka School of International Public Policy (OSIPP).
    4. Andreas Oestreicher & Reinald Koch, 2011. "The Revenue Consequences of Using a Common Consolidated Corporate Tax Base to Determine Taxable Income in the EU Member States," FinanzArchiv: Public Finance Analysis, Mohr Siebeck, Tübingen, vol. 67(1), pages 64-102, March.
    5. Ryo Arawatari & Tetsuo Ono, 2011. "Retirement and social security: the roles of self-fulfilling expectations and educational investments," Economics of Governance, Springer, vol. 12(4), pages 353-383, December.
    6. Jenny de Freitas, 2009. "A probabilistic voting model of progressive taxation with incentive effects," Hacienda Pública Española, IEF, vol. 190(3), pages 9-26, September.
    7. Pascal Belan & Pierre-Jean Messe & François-Charles Wolff, 2010. "Postponing retirement age and labor force participation: the role of family transfers," Recherches économiques de Louvain, De Boeck Université, vol. 76(4), pages 347-370.
    8. repec:eee:hapoch:v1_381 is not listed on IDEAS

    More about this item

    JEL classification:

    • H55 - Public Economics - - National Government Expenditures and Related Policies - - - Social Security and Public Pensions

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