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Topping up and the Political Support for Social Insurance

This paper analyzes how the possibility to complement social income insurance schemes with private insurance affects the political support for social insurance. It is shown that political support for social insurance is weakly decreasing in the replacement rate. Policy makers seeking to maintain support for social insurance schemes can do so by lowering the replacement rate and allowing topping up contracts. The strategy is likely to be a partial explanation for the continued political support for welfare states with universal social insurance schemes such as those in Scandinavia.

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File URL: http://www.ifn.se/wfiles/wp/wp993.pdf
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Paper provided by Research Institute of Industrial Economics in its series Working Paper Series with number 993.

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Length: 7 pages
Date of creation: 12 Dec 2013
Date of revision:
Handle: RePEc:hhs:iuiwop:0993
Contact details of provider: Postal: Research Institute of Industrial Economics, Box 55665, SE-102 15 Stockholm, Sweden
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Fax: +46 8 665 4599
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  1. Gouveia, Miguel, 1997. " Majority Rule and the Public Provision of a Private Good," Public Choice, Springer, vol. 93(3-4), pages 221-44, December.
  2. Epple, Dennis & Romano, Richard E, 1996. "Public Provision of Private Goods," Journal of Political Economy, University of Chicago Press, vol. 104(1), pages 57-84, February.
  3. Casamatta, Georges & Cremer, Helmuth & Pestieau, Pierre, 2000. "Political sustainability and the design of social insurance," Journal of Public Economics, Elsevier, vol. 75(3), pages 341-364, March.
  4. Lyle Scruggs, 2006. "The Generosity of Social Insurance, 1971--2002," Oxford Review of Economic Policy, Oxford University Press, vol. 22(3), pages 349-364, Autumn.
  5. Petretto, Alessandro, 1999. "Optimal social health insurance with supplementary private insurance," Journal of Health Economics, Elsevier, vol. 18(6), pages 727-745, December.
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