Social security in theory and practice (II): Efficiency theories, narrative theories and implications for reform

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Mulligan, Casey B.; Sala-i-Martin, Xavier. Social security in theory and practice (II): Efficiency theories, narrative theories and implications for reform. 1999
http://hdl.handle.net/10230/488
To cite or link this document: http://hdl.handle.net/10230/488
dc.contributor.author Mulligan, Casey B.
dc.contributor.author Sala-i-Martin, Xavier
dc.contributor.other Universitat Pompeu Fabra. Departament d'Economia i Empresa
dc.date.issued 1999-04-01
dc.identifier.uri http://hdl.handle.net/10230/488
dc.description.abstract 166 countries have some kind of public old age pension. What economic forces create and sustain old age Social Security as a public program? Mulligan and Sala-i-Martin (1999b) document several of the internationally and historically common features of social security programs, and explore "political" theories of Social Security. This paper discusses the "efficiency theories", which view creation of the SS program as a full of partial solution to some market failure. Efficiency explanations of social security include the "SS as welfare for the elderly" the "retirement increases productivity to optimally manage human capital externalities", "optimal retirement insurance", the "prodigal father problem", the "misguided Keynesian", the "optimal longevity insurance", the "government economizing transaction costs", and the "return on human capital investment". We also analyze four "narrative" theories of social security: the "chain letter theory", the "lump of labor theory", the "monopoly capitalism theory", and the "Sub-but-Nearly-Optimal policy response to private pensions theory". The political and efficiency explanations are compared with the international and historical facts and used to derive implications for replacing the typical pay-as-you-go system with a forced savings plan. Most of the explanations suggest that forced savings does not increase welfare, and may decrease it.
dc.language.iso eng
dc.relation.ispartofseries Economics and Business Working Papers Series; 385
dc.rights L'accés als continguts d'aquest document queda condicionat a l'acceptació de les condicions d'ús establertes per la següent llicència Creative Commons
dc.rights.uri http://creativecommons.org/licenses/by-nc-nd/3.0/es/
dc.title Social security in theory and practice (II): Efficiency theories, narrative theories and implications for reform
dc.type info:eu-repo/semantics/workingPaper
dc.date.modified 2014-06-03T07:13:59Z
dc.subject.keyword Macroeconomics and International Economics
dc.subject.keyword social security
dc.subject.keyword retirement
dc.subject.keyword gerontocracy
dc.subject.keyword retirement incentives
dc.subject.keyword political theories of social security
dc.rights.accessRights info:eu-repo/semantics/openAccess


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