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UK State Pension Reform in a Public Choice Framework

Booth, P. M. (2010). UK State Pension Reform in a Public Choice Framework (Report No. Actuarial Research Paper No. 194). London, UK: Faculty of Actuarial Science & Insurance, City University London.

Abstract

Social security systems for old age have been explicitly studied in a public choice framework for over 30 years. They illustrate extremely well the problems of allocating economic resources through a system of voting. Pension systems also currently provide some of the most significant threats to the long-term budget positions of developed countries, a point that was made in the Nobel Laureate lecture of Professor James Buchanan. In this paper, we look at the costs and benefits that will be faced by different groups of voters as a result of state pension reform in the UK. It is shown that state pension systems will be very difficult to reform in ways that reduce government provision. However, an exception to this general rule is that reform by raising retirement ages may well be politically feasible. These results are in accordance, not just with theoretical work, but with other empirical work and practical observations.

Publication Type: Monograph (Working Paper)
Publisher Keywords: Public choice economics, pensions policy, state pension reform, social security
Subjects: H Social Sciences > HG Finance
Departments: Cass Business School > Actuarial Science & Insurance > Actuarial Research Reports
URI: http://openaccess.city.ac.uk/id/eprint/2325
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