The Canada Dry pensions system is in some countries one of the frequent routes to early retirement. It constitutes an informal substitute for early retirement programs. Accordingly, firms lay off aged workers they find costly for what they produce and, to get their support, supplement...

We assume that individual voters differ not only according to age but also productivity. In the steady state, workers with wages in the intermediate range join the retired persons to form a majority and vote for a positive level of social security. When a shock decreases population growth,...