The Spirit of the Welfare State? Adaptation in the Demand for Social Insurance | Zendy

Martin Ljunge | Zendy

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The Spirit of the Welfare State? Adaptation in the Demand for Social Insurance

Author(s) -

Martin Ljunge

Publication year - 2011

Publication title -

ssrn electronic journal

Language(s) - English

Resource type - Journals

ISSN - 1556-5068

DOI - 10.2139/ssrn.1967413

Subject(s) - adaptation (eye) , welfare state , social insurance , state (computer science) , welfare , public economics , social welfare , business , economics , actuarial science , political science , market economy , law , psychology , computer science , algorithm , politics , neuroscience

Young generations demand substantially more social insurance than older generations, although program rules have been constant for decades. I postulate a model where the utility of taking up social insurance benefits depends on the past behavior of older generations. The model is estimated with individual panel data. The intertemporal mechanism estimated can account for half of the younger generations’ higher demand for social insurance benefits. The influence of older generations’ behavior remains when instrumenting using mortality rates, which makes a compelling case for a causal intertemporal influence on individual demand.

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