Journal Of Economic Groth2013-09-05 2:57 AM

The farm, the city, and the emergence of social security - Springer

Abstract We study the social, demographic and economic origins of social security. The data for the U.S. and for a cross section of countries suggest that urbanization and industrialization are associated with the rise of social insurance. We describe an OLG model in which demographics, technology, and social security are linked together in a political economy equilibrium. In the model economy, there are two locations (sectors), the farm (agricultural) and the city (industrial) and the decision to migrate from rural to urban locations is endogenous and linked to productivity differences between the two locations and survival probabilities. Farmers rely on land inheritance for their old age and do not support a pay-as-you-go social security system. With structural change, people migrate to the city, the land loses its importance and support for social security arises. We show that a calibrated version of this economy, where social security taxes are determined by majority voting, is consistent with the historical transformation in the United States.

KEYWORDS

SHARE & LIKE

COMMENTS

ABOUT THE AUTHOR

Journal Of Economic Groth

The Journal of Economic Growth is a peer-reviewed academic journal covering research in economic growth and dynamic macroeconomics. It was established in 1996 and is published by Springer Science+Business Media. The journal deals with both theories and their empirics, and examines the entire array of subject areas in economic growth, including neoclassical and endogenous growth models, growth and income distribution, human capital, fertility, trade, development, migration, money, the political e

0 Following 0 Fans 0 Projects 13 Articles

SIMILAR ARTICLES

Abstract We examine the long-run relationship between fertility, mortality, and income using panel cointegration techniques and the available data for

Read More

Abstract This paper discusses the incentive to bundle when consumer valuations are non-additive and/or when products are supplied by separate sellers.

Read More

Abstract A simple open-economy AK model with collateral constraints accounts for growth breaks and growth-reversal episodes, during which countries fa

Read More

Abstract We introduce a new time series measure of the extent of federal regulation in the U.S. and use it to investigate the relationship between fed

Read More

Abstract We study the social, demographic and economic origins of social security. The data for the U.S. and for a cross section of countries suggest

Read More

Abstract We study a model where economic growth is fueled by public basic-research investment and the importation of leading technology from foreign c

Read More

Abstract We consider a weighting scheme that yields a best-case scenario for measured human development such as the official equally-weighted Human De

Read More

Abstract This paper analyzes the interaction between socioeconomic factors and the value and prevalence of female virginity. Using a simple model of t

Read More

Abstract This paper puts forth a theory of the Industrial Revolution whereby an economy transitions from Malthusian stagnation to modern economic grow

Read More

Abstract Pritchett (J Econ Growth 5:361–384, 2000) convincingly argued that the difference between investment cost and capital value is of first-order

Read More