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Discussion Papers In Economics And Business.11-26-Rev.2

Old-age Social Security vs. Forward Intergenerational Public Goods Provision

Graduate School of Economics and Osaka School of International Public Policy (OSIPP) Osaka University

英語

2013-08

http://hdl.handle.net/11094/24715

This paper introduces an overlapping-generations model with earnings hetero-geneity and borrowing constraints. The labor income tax and the allocation of tax revenue between social security and forward intergenerational public goods are determined in a bidimensional majoritarian voting game played by successive gen-erations. The political equilibrium is characterized by an ends-against-the-middle equilibrium where low- and high-income individuals form a coalition in favor of a lower tax rate and less social security while middle-income individuals favor a higher tax rate and greater social security. Government spending then shifts from social security to public goods provision if higher wage inequality is associated with the borrowing constraint and a high elasticity of marginal utility of youthful consump-tion.

Old-age Social Security vs. Forward Intergenerational Public Goods Provision

Graduate School of Economics and Osaka School of International Public Policy (OSIPP) Osaka University

英語

2013-08

Discussion Papers In Economics And Business

11-26-Rev.2

http://hdl.handle.net/11094/24715