|Series||Discussion paper series / Centre for Economic Policy Research -- no. 1025, Discussion paper series -- no. 1025.|
|Contributions||Centre for Economic Policy Research.|
In the overlapping‐generations model studied in this paper, all individuals currently alive vote on social security in every period. In equilibrium, the size of social security is larger, the greater is the proportion of elderly people in the population, and the greater is the Cited by: Get this from a library! A positive theory of social security. [Guido Enrico Tabellini; National Bureau of Economic Research.]. Get this from a library! A Positive Theory of Social Security.. [Guido Tabellini; National Bureau of Economic Research.] -- Abstract: In many countries. social security is a large fraction of the. Abstract: government budget. Why is it, given that at any moment in time the number. Abstract: of recipients of social. Galasso and Profeta () sur-5 J o u r n a l P r e -p r o o f vey this literature. Cooley and Soares (); Tabellini (), Bohn (, ) and Demange ( show how social security can be Author: Guido Tabellini.
A Positive Theory of Social Security Tabellini, Guido In many countries, social security accounts for a large fraction of the government budget. Why is this so, given that at any point in time the number of recipients of social security benefits is smaller than the number of contributors? A POSITIVE THEORY OF SOCIAL SECURITY of the labor force. Societies may want to do such a thing because output per capita is higher if the elderly do not work, even though the private marginal product of an old worker (and therefore his spot market wage rate) may be positive. In other words, transfers are a way to. The goal of this paper is to present a positive theory of social security. The main idea is that social security programs and intergenerational transfers are a way to buy the elderly out of the labor force. Positive social security benefits are associated with taxes that will not only decrease each worker's level of consumption and savings but lower the labor supply and decrease the economywide stock of capital for the next period. The drop in next period's capital will .
In this paper I make two points. First, I argue that social security programs around the world link public pensions to retirement: people do not lose their pensions if they make a million dollars a year in the stock market, but they do confront marginal tax rates of up to percent if they choose to work. Second, after arguing that most existing theories cannot explain this fact, I construct. A Positive Theory of Social Security Guido Tabellini. NBER Working Paper No. Issued in February NBER Program(s):Monetary Economics. In many countries. social security is a large fraction of the government by: Torsten Persson, Guido Tabellini Political Economics and Public Finance**We thank a number of colleagues – especially Alan Auerbach, David Baron, Tim Besley, Francesco Daveri, Avinash Dixit, and Gerard Roland – and Ph.D. students – especially Gisela Waisman – for comments on earlier drafts. Christina Lönnblad and Alessandra Startari provided editorial assistance. SOCIAL SECURITY AND RETIREMENT DECISION complete elimination of this bias (i.e. a switch to an actuarially fair system) is not the right answer. This is so for two reasons. First, some distortions are second-best optimal. This is the normative argument. Second, and on the positive side, the.