Productivity Growth and the Political Economy of Social Security
- Cite this article as:
- Wigger, B.U. Public Choice (2001) 106: 53. doi:10.1023/A:1005118601448
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The present paper provides an analysis of unfunded social securityas the outcome of a public decision making process in an endogenousgrowth economy. It employs a model in which there is a non-monotonic relationship beween productivity growth and the scale ofpublic intergenerational redistribution. The paper shows thatalthough unfunded social security need not harm growth in general,it is likely to harm growth in a democracy. This effect isreinforced by population aging.