The political economy of social protection and redistribution.

Summary In this thesis we analyze, from a theoretical point of view, the political choice of social insurance and pay-as-you-go pension systems. The first chapter reviews the literature on the political economy of redistribution, social insurance and pay-as-you-go pensions. The second chapter emphasizes the need to take into account certain political constraints when choosing social insurance systems. These systems are defined here by two parameters, the contribution rate and the degree of redistribution. While the optimal system from a social welfare point of view is a fully redistributive system, we show that introducing a policy constraint on the contribution rate can lead to the adoption of a partially redistributive system. The third chapter deals with the determination of pay-as-you-go pension systems. We show that a pension system that redistributes income among the working population can be supported in the steady state by the majority of voters, even when the interest rate is higher than the population growth rate. Finally, the possibility of a negative shock to the population growth rate leads to the adoption of a fully redistributive system at a constitutional stage. A minimum pension is then imposed in order to protect the generations of the demographic transition. The last chapter also deals with pay-as-you-go pensions. Beyond the choice of contribution rate, society must decide to implement a reform, which is in no way linked to the pension system. This reform divides working people but leaves retirees indifferent. Using a political agency model, we show that, when the number of retirees is sufficiently large, the contribution rate chosen by society is higher than the one preferred by young people, who constitute the majority of voters.