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Please use this identifier to cite or link to this item:
http://hdl.handle.net/2451/26083
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| Title: | The Farm, the City, and the Emergence of Social Security |
| Authors: | Cooley, Thomas F.
Caucutt, Elizabeth M.
Guner, Nezih |
| Keywords: | Social Security
Political Economy
Migration |
| Issue Date: | Dec-2006 |
| Series/Report no.: | EC-06-21 |
| Abstract: | During the period from 1880 to 1950 publicly managed retirement security
programs became an important part of the social fabric in most advanced
economies. In this paper we study the social, demographic and economic
origins of social security. We describe a model economy in which
demographics, technology, and social security are linked together. We
study an economy with two locations (sectors), the farm (agricultural)
and the city (industrial). The decision to migrate from rural to urban
locations is endogenous and linked to productivity differences between
the two locations and survival probabilities. Furthermore, the level of
social security is determined by majority voting. We show that a
calibrated version of this economy is consistent with the historical
transformation in the United States. Initially a majority of voters live
on the farm and do not want to implement social security. Once a
majority of the voters move to the city, the median voter prefers a
positive social security tax, and social security emerges. |
| URI: | http://hdl.handle.net/2451/26083 |
| Appears in Collections: | Economics Working Papers
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