The politics of social security in aging societies
The decline in fertility rates and increases in life expectancy experienced by many countries in the last decades have changed the economics of social security. In this paper, we examine social security (SS) as a pure transfer system, akin to a Ponzi scheme, in an endowment economy. We show that the distributive effect of the transfer scheme on each generation is described by the ratio of the present value of pension benefits and the remaining contributions to SS.