Social Security, Retirement, and the Single-Mindedness of the Electorate

38 Pages Posted: 16 May 2003 Last revised: 1 Nov 2010

See all articles by Casey B. Mulligan

Casey B. Mulligan

University of Chicago; National Bureau of Economic Research (NBER)

Xavier Sala-i-Martin

Columbia University, Graduate School of Arts and Sciences, Department of Economics

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Date Written: May 2003

Abstract

We propose a positive theory that is consistent with two important features of social security programs around the world: (1) they redistribute income from young to old and (2) they induce retirement. We construct a voting model that includes a political campaign' or debate' prior to the election. The model incorporates single-mindedness' of the groups that do not work: while the workers divide their political capital between their age concerns' and occupational concerns', the retired concentrate all their political capital to support their age group. In our model, the elderly end up getting transfers from the government (paid by the young) and distortionary labor income taxes induce the retirement of the elderly. In addition, our model predicts that occupational groups that work more will tend to have more political power. The opposite is true for non-occupational groups (such as the elderly). We provide some evidence that supports these additional predictions.

Suggested Citation

Mulligan, Casey B. and Sala-i-Martin, Francesc Xavier, Social Security, Retirement, and the Single-Mindedness of the Electorate (May 2003). NBER Working Paper No. w9691. Available at SSRN: https://ssrn.com/abstract=406063

Casey B. Mulligan (Contact Author)

University of Chicago ( email )

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Francesc Xavier Sala-i-Martin

Columbia University, Graduate School of Arts and Sciences, Department of Economics ( email )

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