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...

"Researchers analyzing wages with the German IAB employment sample are confronted with a censoring problem: The data comes from the social security accounts. Therefore the wages are only given up to the contribution limit of the social security (A documentation of the data set is found in...