The political economy of derived pension rights
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Derived pension rights (including survivor benefits and spousal compensations for one-earner couples) exist in most Social Security systems but with variable generosity. They are mainly viewed as a means to alleviate poverty among older women living alone. The purpose of this paper is to explain how they can emerge from a political economy process when Social Security is a combination of Bismarckian and Beveridgean pillars. We find that the pension system should be contributive but with a positive level of derived rights. We also show that such a system encourages stay-at-home wives, thus revealing an unpleasant trade-off between female labor participation and poverty alleviation.
KeywordsSocial Security Derived pension rights Majority voting Individualization of pension rights
JEL ClassificationD72 D78 H55
We would like to thank Yvonne Adema, Carole Bonnet and Erik Schokkaert as well as an anonymous referee for helpful comments.
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