We suggest a political economy explanation for the stylized fact that intragenerationally more redistributive social security systems are smaller. Our key insight is that linking benefits to past earnings (less redistributiveness) reduces the efficiency cost of social security (due to endogenous...

We suggest a political economy explanation for the stylized fact that intragenerationally more redistributive social security systems are smaller. We relate the stylized fact to an efficiency-redistribution trade-off to be resolved by political process. The inefficiency of social security...

Eastern Enlargement of the European Union challenged the design of European Welfare states. Many authors discuss the impact of East European social security systems on their West European counterparts and fear a “race to the bottom”. This paper addresses welfare state developments in the...