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Article
Social Security and Democracy
The B.E. Journal of Economic Analysis & Policy (2010)
  • Casey B Mulligan, University of Chicago
  • Ricard Gil, University of California, Santa Cruz
  • Xavier X Sala-i-Martin, Columbia University
Abstract

Using some new international data sets to produce both across-country econometric estimates as well as case studies of South American and southern European countries, we find that Social Security policies vary according to economic and demographic factors but that very different political histories can result in the same Social Security policy. We find weak partial correlation between democracy and the size of Social Security budgets, on how those budgets are allocated, or how economic and demographic factors affect Social Security. If there is any observed difference between democracies and non-democracies, it is that the former spend a little less of their GDP on Social Security, grow their budgets a bit more slowly, and cap their payroll tax more often, than do economically and demographically similar non-democracies. Democracies and non-democracies are equally likely to have benefit formulas inducing retirement and, conditional on GDP per capita, equally likely to induce retirement with a retirement test vs. an earnings test.

Keywords
  • Social Security,
  • pension spending,
  • payroll tax,
  • Democracy
Publication Date
March 30, 2010
Citation Information
Casey B Mulligan, Ricard Gil and Xavier X Sala-i-Martin. "Social Security and Democracy" The B.E. Journal of Economic Analysis & Policy Vol. 10 Iss. 1 (2010)
Available at: http://works.bepress.com/casey_mulligan/1/