TY  - JOUR
AU  - Mulligan,Casey B.
AU  - Sala-i-Martin,Xavier
TI  - Social Security in Theory and Practice (I):  Facts and Political Theories
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 7118
PY  - 1999
Y2  - May 1999
UR  - http://www.nber.org/papers/w7118
L1  - http://www.nber.org/papers/w7118.pdf
N1  - Author contact info:
Casey B. Mulligan
University of Chicago
Department of Economics
1126 East 59th Street
Chicago, IL  60637
Tel: 773/702-9017
Fax: 773/702-8490
E-Mail: c-mulligan@uchicago.edu

Xavier Sala-i-Martin
Department of Economics
Columbia University
420 West 118th Street, 1005
New York, NY 10027
Tel: 212/854-7055
Fax: 212/854-8059
E-Mail: xs23@columbia.edu
AB  - 166 countries have some kind of public old age pension. What economic forces create and sustain old age Social Security as a public program? We document some of the internationally and historically common features of Social Security programs including explicit and implicit taxes on labor supply, pay-as-you-go features, intergenerational redistribution, benefits which are increasing functions of lifetime earnings and not means-tested.  We partition theories of Social Security into three groups:  political',  efficiency' and narrative' theories. We explore three political theories in this paper: the majority rational voting model (with its two versions:  the elderly as the leaders of a winning coalition with the poor' and the  once and for all election' model), the  time-intensive model of political competition' and the  taxpayer protection model'. Each of the explanations is compared with the international and historical facts. A companion paper explores the  efficiency' and  narrative' theories and derives implications of all the theories for replacing the typical pay-as-you-go system with a forced savings plan.
ER  -