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Article
The political power of the retirees in a two-dimensional voting model
Journal of Public Economic Theory (2003)
  • Georges Casamatta
Abstract

We show that the retirees are able to obtain favorable pension policies whereas they belong to a minority in the population. The argument relies on the multidimensional nature of the political process. We consider a two-dimensional collective choice problem. The first of these choices is the level of the contribution rate to the Pay-As-You- Gopension system. The second is a noneconomic decision, unrelated to the pension system. Using a political agency model, we show that, as soon as the retirees are sufficiently numerous, the equilibrium tax rate may be higher than the tax rate preferred by the young, who yet constitute a majority over the pension issue.

Disciplines
Publication Date
October, 2003
Citation Information
Georges Casamatta. "The political power of the retirees in a two-dimensional voting model" Journal of Public Economic Theory Vol. 5 Iss. 4 (2003)
Available at: http://works.bepress.com/georges_casamatta/7/