The future of social security

• 成果类型: Article
• 署名作者: Gonzalez-Eiras, Martin; Niepelt, Dirk
• 署名单位: Universidad de San Andres Argentina; Study Center Gerzensee; University of Bern; Stockholm University; Centre for Economic Policy Research - UK
• 刊物名称: JOURNAL OF MONETARY ECONOMICS
• ISSN/ISSBN: 0304-3932
• DOI: 10.1016/j.jmoneco.2007.10.005
• 发表日期: 2008
• 页码: 197-218
• 关键词: Social Security; probabilistic voting; Markov perfect equilibrium; Saving; labor supply

摘要

We analyze the effect of the projected demographic transition on the political support for social security, and equilibrium outcomes. Embedding a probabilistic-voting setup of electoral competition in the standard OLG model with capital accumulation, we find that intergenerational transfers arise in the absence of altruism, commitment, or trigger strategies. Closed-form solutions predict population ageing to lead to higher social security tax rates, a rising share of pensions in GDP, but eventually lower social security benefits per retiree. The response of equilibrium tax rates to demographic shocks reduces old-age consumption risk. Calibrated to match features of the U.S. economy, the model suggests that, in response to the projected demographic transition, social security tax rates will gradually increase to 16%. Other policies that distort labor supply will become less important; labor supply therefore will rise, in contrast with frequently voiced fears. (C) 2007 Elsevier B.V. All rights reserved.