IDEAS home Printed from https://ideas.repec.org/p/osk/wpaper/1112.html
   My bibliography  Save this paper

Design of a Social Security System: Pension System vs. Unemployment Insurance

Author

Listed:
  • Yusuke Kinai

    (Graduate School of Economics, Osaka University)

Abstract

This paper presents consideration of how the social security system evolves as the attributes of voters change. In our setting, policy determination is based on majority voting. The government has two components of social security policy: a pension system and unemployment insurance. When workers constitute most voters, the pension system is supported and when unemployed people are the majority, unemployment insurance is adopted. Under this setting, employing the concept of structure-induced equilibrium developed by Shepsle (1979), the present paper describes how the contents of the social security system evolve depending on the dynamics of capital accumulation and the unemployment rate, and demonstrates the possibility that one or the other social security system ceases to exist in certain instances.

Suggested Citation

  • Yusuke Kinai, 2011. "Design of a Social Security System: Pension System vs. Unemployment Insurance," Discussion Papers in Economics and Business 11-12, Osaka University, Graduate School of Economics.
    • Handle: RePEc:osk:wpaper:1112
    as

    Download full text from publisher

    File URL: http://www2.econ.osaka-u.ac.jp/library/global/dp/1112.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Michael Bräuninger, 2005. "Social Security, Unemployment, and Growth," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 12(4), pages 423-434, August.
    2. John Hassler & José V. Rodríguez Mora & Kjetil Storesletten & Fabrizio Zilibotti, 2003. "The Survival of the Welfare State," American Economic Review, American Economic Association, vol. 93(1), pages 87-112, March.
    3. Panu Poutvaara, 2006. "On the political economy of social security and public education," Journal of Population Economics, Springer;European Society for Population Economics, vol. 19(2), pages 345-365, June.
    4. Tetsuo Ono, 2007. "Unemployment dynamics in an OLG economy with public pensions," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 33(3), pages 549-577, December.
    5. Grossman, Gene M. & Yanagawa, Noriyuki, 1993. "Asset bubbles and endogenous growth," Journal of Monetary Economics, Elsevier, vol. 31(1), pages 3-19, February.
    6. Conde-Ruiz, Jose Ignacio & Galasso, Vincenzo, 2005. "Positive arithmetic of the welfare state," Journal of Public Economics, Elsevier, vol. 89(5-6), pages 933-955, June.
    7. Rui Coimbra & Teresa Lloyd-Braga & Leonor Modesto, 2005. "Endogenous fluctuations in unionized economies with productive externalities," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 26(3), pages 629-649, October.
    8. J. Ignacio Conde-Ruiz & Paola Profeta, 2007. "The Redistributive Design of Social Security Systems," Economic Journal, Royal Economic Society, vol. 117(520), pages 686-712, April.
    9. Bean, Charles & Pissarides, Christopher, 1993. "Unemployment, consumption and growth," European Economic Review, Elsevier, vol. 37(4), pages 837-854, May.
    10. Hu, Sheng Cheng, 1982. "Social Security, Majority-Voting Equilibrium and Dynamic Efficiency," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 23(2), pages 269-287, June.
    11. Roland Demmel & Christian Keuschnigg, 2000. "Funded Pensions and Unemployment," FinanzArchiv: Public Finance Analysis, Mohr Siebeck, Tübingen, vol. 57(1), pages 22-38, September.
    12. Galor, Oded & Lach, Saul, 1990. "Search Unemployment in an Overlapping-Generations Setting," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 31(2), pages 409-419, May.
    13. Leo Kaas & Leopold Thadden, 2004. "Budgetary policy and unemployment dynamics in an olg model with collective bargaining," Economic Journal, Royal Economic Society, vol. 114(498), pages 867-889, October.
    14. Meltzer, Allan H & Richard, Scott F, 1981. "A Rational Theory of the Size of Government," Journal of Political Economy, University of Chicago Press, vol. 89(5), pages 914-927, October.
    15. Lorenzo Forni, 2005. "Social Security as Markov Equilibrium in OLG Models," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 8(1), pages 178-194, January.
    16. Corneo, Giacomo & Marquardt, Marko, 2000. "Public pensions, unemployment insurance, and growth," Journal of Public Economics, Elsevier, vol. 75(2), pages 293-311, February.
    17. Imoto, Shin, 2003. "An example of nonlinear endogenous business cycle model: build in the trade union," Economics Letters, Elsevier, vol. 81(1), pages 117-124, October.
    18. Krusell, Per & Quadrini, Vincenzo & Rios-Rull, Jose-Victor, 1997. "Politico-economic equilibrium and economic growth," Journal of Economic Dynamics and Control, Elsevier, vol. 21(1), pages 243-272, January.
    19. Bethencourt, Carlos & Galasso, Vincenzo, 2008. "Political complements in the welfare state: Health care and social security," Journal of Public Economics, Elsevier, vol. 92(3-4), pages 609-632, April.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Ono, Tetsuo, 2019. "Growth, Unemployment, And Fiscal Policy: A Political Economy Analysis," Macroeconomic Dynamics, Cambridge University Press, vol. 23(8), pages 3099-3139, December.
    2. Tetsuo Ono, 2014. "Economic Growth and the Politics of Intergenerational Redistribution," Discussion Papers in Economics and Business 14-17-Rev., Osaka University, Graduate School of Economics, revised Sep 2015.
    3. Tetsuo Ono, 2015. "Public education and social security: a political economy approach," Economics of Governance, Springer, vol. 16(1), pages 1-25, February.
    4. Ryo Arawatari & Tetsuo Ono, 2009. "The Political Economy of Social Security and Public Goods Provision in a Borrowing-constrained Economy," Discussion Papers in Economics and Business 09-38, Osaka University, Graduate School of Economics.
    5. Casamatta, G. & Batté, L., 2016. "The Political Economy of Population Aging," Handbook of the Economics of Population Aging, in: Piggott, John & Woodland, Alan (ed.), Handbook of the Economics of Population Aging, edition 1, volume 1, chapter 0, pages 381-444, Elsevier.
    6. Bossi, Luca & Gumus, Gulcin, 2013. "Income Inequality, Mobility, And The Welfare State: A Political Economy Model," Macroeconomic Dynamics, Cambridge University Press, vol. 17(6), pages 1198-1226, September.
    7. Tetsuo Ono, 2010. "Growth and unemployment in an OLG economy with public pensions," Journal of Population Economics, Springer;European Society for Population Economics, vol. 23(2), pages 737-767, March.
    8. Watanabe, Minoru & Miyake, Yusuke & Yasuoka, Masaya, 2018. "Unemployment, Income Growth and Social Security," MPRA Paper 86155, University Library of Munich, Germany.
    9. Ryo Arawatari & Tetsuo Ono, 2011. "Old-age Social Security vs. Forward Intergenerational Public Goods Provision," Discussion Papers in Economics and Business 11-26-Rev.2, Osaka University, Graduate School of Economics, revised Aug 2013.
    10. Naito, Katsuyuki, 2012. "Two-sided intergenerational transfer policy and economic development: A politico-economic approach," Journal of Economic Dynamics and Control, Elsevier, vol. 36(9), pages 1340-1348.
    11. Tetsuo Ono, 2016. "Marital Status and Derived Pension Rights: A Political Economy Model of Public Pensions with Borrowing Constraints," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 18(1), pages 99-124, February.
    12. Ryo Arawatari & Tetsuo Ono, 2014. "Old-age Social Security versus Forward Intergenerational Public Goods Provision," The Japanese Economic Review, Japanese Economic Association, vol. 65(3), pages 282-315, September.
    13. Tetsuo Ono, 2016. "Inequality and the politics of redistribution," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 23(2), pages 191-217, April.
    14. Tetsuo Ono, 2007. "Unemployment dynamics in an OLG economy with public pensions," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 33(3), pages 549-577, December.
    15. Tetsuo Ono, 2012. "Inequality Dynamics and the Politics of Redistribution," Discussion Papers in Economics and Business 12-09-Rev, Osaka University, Graduate School of Economics, revised Nov 2013.
    16. Luca Gori & Luciano Fanti, 2009. "Right-to-manage unions endogenous growth and welfare," Economics Bulletin, AccessEcon, vol. 29(2), pages 903-917.
    17. Ken‐ichi Hashimoto & Ryonghun Im, 2019. "Asset bubbles, labour market frictions and R&D‐based growth," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 52(2), pages 822-846, May.
    18. Ryo Arawatari & Tetsuo Ono, 2008. "Aging, Inequality and Social Security," Discussion Papers in Economics and Business 08-19, Osaka University, Graduate School of Economics.
    19. Gonzalez-Eiras, Marti­n & Niepelt, Dirk, 2008. "The future of social security," Journal of Monetary Economics, Elsevier, vol. 55(2), pages 197-218, March.
    20. Poutvaara, Panu, 2011. "The expansion of higher education and time-consistent taxation," European Journal of Political Economy, Elsevier, vol. 27(2), pages 257-267, June.

    More about this item

    Keywords

    Social Security; Pension System vs. Unemployment Insurance; Majority Voting; Structureinduced equilibrium.;
    All these keywords.

    JEL classification:

    • E61 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Policy Objectives; Policy Designs and Consistency; Policy Coordination
    • H53 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Welfare Programs
    • H55 - Public Economics - - National Government Expenditures and Related Policies - - - Social Security and Public Pensions

    NEP fields

    This paper has been announced in the following NEP Reports:

    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:osk:wpaper:1112. See general information about how to correct material in RePEc.

    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.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with 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.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: The Economic Society of Osaka University (email available below). General contact details of provider: https://edirc.repec.org/data/feosujp.html .

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

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.