In a stochastic two-period OLG model, featuring an aggregate shock to the economy, ex-ante optimality requires intergenerational risk sharing. We compare the level of time-consistent intergenerational risk sharing chosen by a social planner and by office seeking politicians. In the political...

What is the future of social systems in OECD countries ? In our view, the answer belongs to the realm of politics. We evaluate how political constraints shape the social security system in six countries - France, Germany, Italy, Spain, the UK and the US - under population aging. Two main aspects...

In an empirical investigation, the paper identifies the main political economy drivers of structural policy changes in OECD countries' labour and product markets over the 1985-2003 and 1973-2003 periods respectively. Some of the drivers are beyond the control of governments (i.e., that are...

type="main" xml:lang="en" <title type="main">SUMMARY</title> </section> <title type="main">Politics, ageing and pensions</title> <p> What is the future of social security systems in OECD countries? We suggest that the answer belongs to the realm of politics, and evaluate how political constraints and ageing shape the social security system. The increasing ratio...</p>

This paper argues that social security enjoys wider political support than other welfare programs because: (i) retirees constitute the most homogeneous voting group,\ and (ii) the intragenerational redistribution component of social security induces low-income young to support this system. In a...

We document the presence of a trade-off between unemployment benefits (UB) and employment protection legislation (EPL) in the provision of insurance against labour market risk. The mix of quantity and price protective measures adopted by the various countries would seem to correspond to a stable...

Generous early retirement provisions account for a large proportion of the drop in the labor force participation of elderly workers. The aim of this paper is to provide a positive theory of early retirement. We suggest that the political support for generous early retirement provisions relies...

Why does the largest US welfare programme select its recipients by their age, rather than by their earnings or wealth? In a dynamic efficient overlapping generation economy with earnings heterogeneity, we analyze a welfare system composed of a within-cohort redistribution scheme and an unfunded...

A significant ageing trend can be observed in Europe and in other parts of the world. Fertility is decreasing and life expectancy increasing. The impact of migration is growing. The book deals with the implications for financial markets of these demographic trends. Leading economists and...