Working Paper Series
Topping up and the Political Support for Social Insurance
Abstract: This paper analyzes how the possibility to complement
social income insurance schemes with private insurance affects the
political support for social insurance. It is shown that political support
for social insurance is weakly decreasing in the replacement rate. Policy
makers seeking to maintain support for social insurance schemes can do so
by lowering the replacement rate and allowing topping up contracts. The
strategy is likely to be a partial explanation for the continued political
support for welfare states with universal social insurance schemes such as
those in Scandinavia.
Keywords: Social insurance; Topping up; Redistribution; (follow links to similar papers)
JEL-Codes: D72; H53; (follow links to similar papers)
7 pages, December 12, 2013
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