Voting on Pensions: A Survey

de Walque, Gregory

doi:10.2139/ssrn.1691476

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Voting on Pensions: A Survey

National Bank of Belgium Working Paper No. 62

55 Pages Posted: 14 Oct 2010

See all articles by Gregory de Walque

Gregory de Walque

Facultés Universitaires Notre-Dame de la Paix (FUNDP) - Faculty of Economics, Management and Social Sciences; National Bank of Belgium

Date Written: October 12, 2004

Abstract

The paper presents a non-exhaustive survey of the literature designed to explain emergence, size and political sustainability of pay-as-you-go pension systems. It proposes a simple framework of analysis (a small open two overlapping generation economy model), around which some variants are displayed. Dictatorship of the median voter is assumed. The text is organized to answer the following questions: (i) do political equilibria with PAYG pension schemes exist, (ii) why do they emerge, (iii) what are the conditions for the participation constraint of the pension game to be verified, and finally (iv) what is the size of the pension system chosen by the median voter and how is this size influenced by an exogenous (e.g. demographic) shock.

Keywords: public pensions, voting

JEL Classification: D72, D91, H55

Suggested Citation: Suggested Citation

de Walque, Gregory and de Walque, Gregory, Voting on Pensions: A Survey (October 12, 2004). National Bank of Belgium Working Paper No. 62, Available at SSRN: https://ssrn.com/abstract=1691476 or http://dx.doi.org/10.2139/ssrn.1691476