Social security, social welfare and the aging population

Abstract

This study examines the effects of pay-as-you-go social security programs in aging economies when the middle-aged both educate their dependent children and subsidize the retirement of the old. Using an overlapping generations framework in which agents are three-period lived but timing of death in the third period is uncertain, we analyze the effects of social security tax schemes, under various demographic assumptions, on capital accumulation, education expenditures, social welfare, and economic growth. We find that in many cases social security crowds out education, and reduces economic growth and social welfare. JEL Classification Numbers: D9, H2, I2

The fight for scarce resources: The determinants of public, private, and sectoral education spending in OECD countries

“…Im Zuge der in der OECD-Welt zu beobachtenden Bevölkerungsalterung beschränken die Leistungsansprüche der Bevölke-rungsgruppe der Rentner in zunehmendem Maße den fiskalischen Spielraum der öf-fentlichen Sozialversicherungssysteme (Pampel/Williamson 1988, 1989. Die Gruppe der Älteren wird außerdem zu einer wahlpolitisch entscheidenden und mächtigen, stillen Vetomacht (Pecchenino/Utendorf 1999), die die Sicherung der gewährten Ansprü-che vor die aktive Zukunftsvorsorge stellt (Kielmansegg 2001). Die junge Generation der Schüler und Studenten, die vor allem in den Genuss von Bildungsleistungen kommen sollen, sind politisch schwach.…”

Social security policy with public debt in an aging economy

“…Several studies have analyzed public pension and population aging in economic growth models (e.g., Meijdam and Verbon (1997), Pecchenino and Pollard (1997), Pecchenino and Utendorf (1999), and Futagami and Nakajima (2001) 2 ). However, these studies do not consider a social security policy together with public debt.…”

Partially Funded Social Security and Inter-Generational Distribution

“…It may be convenient to describe both the PAYG consumption and Partially Funded consumption in term of the one in the Fully Funded system. Thus we have This implies that if the long term population growth rate is higher than the steady state net return to capital, then because the PAYG consumption in both periods is greater than the one in Fully Funded, PAYG utility is greater than the Fully Funded utility 12 , i.e., …”