TY  - JOUR
AU  - Mulligan,Casey B.
AU  - Gil,Ricard
AU  - Sala-i-Martin,Xavier
TI  - Social Security and Democracy
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 8958
PY  - 2002
Y2  - May 2002
UR  - http://www.nber.org/papers/w8958
L1  - http://www.nber.org/papers/w8958.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

Ricard Gil
Johns Hopkins Carey Business School
E-Mail: ricard.gil@jhu.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  - Many political economic theories use and emphasize the process of voting in their explanation of the growth of Social Security, government spending, and other public policies.  But is there an empirical connection between democracy and Social Security program size or design?  Using some new international data sets to produce both country-panel econometric estimates as well as case studies of South American and southern European countries, we find that Social Security policy varies according to economic and demographic factors, but that very different political histories can result in the same Social Security policy.  We find little partial effect of democracy on the size of Social Security budgets, on how those budgets are allocated, or how economic and demographic factors affect Social Security.  If there is any observed difference, democracies spend a little less of their GDP on Social Security, grow their budgets a bit more slowly, and cap their payroll tax more often, than do economically and demographically similar nondemocracies.  Democracies and nondemocracies are equally likely to have benefit formulas inducing retirement and, conditional on GDP per capita, equally likely to induce retirement with a retirement test vs. an earnings test.
ER  -