eprintid: 1646
rev_number: 11
eprint_status: archive
userid: 6
dir: disk0/00/00/16/46
datestamp: 2013-07-17 10:41:54
lastmod: 2014-01-24 14:12:06
status_changed: 2013-07-17 10:41:54
type: monograph
metadata_visibility: show
creators_name: Wen, Xue
creators_id: xue.wen@imtlucca.it
title: A Probabilistic Voting Model of Social Security: The Role of Myopic Agents
ispublished: unpub
subjects: HA
subjects: HB
subjects: HM
divisions: EIC
full_text_status: public
monograph_type: working_paper
keywords: Keywords: Myopia, Social Security, Probabilistic Voting   -   
JEL Classifications: H55, D91, H30
abstract: This paper investigates the political incentives for the design of social security policy in competitive democracies with both far-sighted and myopic households. The social security scheme depends on both a payroll tax rate which determines the size of the pension and a Bismarckian factor that represents its redistributive component. By considering a probabilistic voting setting of electoral competition, we analyze the political game between office-seeking politicians and self-interested citizens.
Politicians can win the election by targeting the voters in each group by trading off the generosity and the redistribution degree of the public pension system. In the
political equilibrium, the contribution rate is U-shaped with respect to the Bismarckian factor. Moreover, the equilibrium Bismarckian factor unambiguously decreases with the proportion of myopic agents, whereas the equilibrium payroll tax rate curve is U-shaped with respect to the proportion of myopic agents.
date: 2012-10
date_type: published
number:  
pages: 49
institution: IMT Institute for Advanced Studies Lucca
citation:   Wen, Xue  A Probabilistic Voting Model of Social Security: The Role of Myopic Agents.  Working Paper  # /2012        (Unpublished)   
document_url: http://eprints.imtlucca.it/1646/1/Wen_WP_Oct_2012.pdf