Essays on the causes and effects of social security systems

Chapter 1 seeks to explain the history of national Old-Age Insurance (OAI) and Health Insurance (HI). A hazard model of a country's ‘risk’ of creating a social insurance scheme is estimated. Many theories about the adoption of social insurance exist, but none fits the data well. The risk of adopting a system declines in a country's wealth and in the ethnic heterogeneity of its population. Catholic countries are more likely to create earnings-related OAI systems. The growth of OAI and HI spending since 1960 has varied considerably, even allowing for differential population ageing. Right-wing governments spend more on OAI than left-wing governments. It is concluded that social insurance can be politically expedient for many reasons.; Chapter 2 examines the effect of Old-Age Insurance on older men's labour supply. Historical data on participation rates and OAI rules in thirteen developed countries show rapid falls in participation among men aged 60–4 after pensions were extended to them. I estimate participation elasticities of −0.06 with respect to replacement rates and 0.19 to the net-of-tax wage. It does not appear that endogenous OAI changes bias the regression coefficients. The average extension of OAI benefits to men aged 60–4 reduced their participation rate by 8.4 percentage points. Older men's labour supply has declined for other reasons too, however.; Chapter 3 analyses the impact on saving of the rise in British women's state pension age from 60 to 65. This change affects wealth but not work incentives. A raised pension age for women was expected before its announcement in November 1993, but which cohorts would be affected was not known. Saving by affected and unaffected cohorts of women is compared before and after this announcement, and trends in saving by women are compared to those among men. I find no evidence of increased saving by women after the announcement. I conclude that younger women either were myopic with respect to their future incomes or understood that their family dynasties' wealth was not affected by the reform.