Our theoretical framework predicts that the prevailing internal organization of the family, characterized by weak or strong ties, affected the initial design of pension systems. Using a historical classification, we show that in societies dominated by (weak) absolute nuclear families safety net pension systems emerged; and viceversa in societies dominated by strong families. These results are robust to controlling for alternative legal, religious, and political explanations. Evidence on individual data confirm these findings: US citizens whose ancestors came from “strong family” countries (communitarian or egalitarian nuclear) support the government as a provider of old age security through generous retirement benefits.
When the state mirrors the family: the design of pension systems
GALASSO, VINCENZO;PROFETA, PAOLA ANTONIA
2011
Abstract
Our theoretical framework predicts that the prevailing internal organization of the family, characterized by weak or strong ties, affected the initial design of pension systems. Using a historical classification, we show that in societies dominated by (weak) absolute nuclear families safety net pension systems emerged; and viceversa in societies dominated by strong families. These results are robust to controlling for alternative legal, religious, and political explanations. Evidence on individual data confirm these findings: US citizens whose ancestors came from “strong family” countries (communitarian or egalitarian nuclear) support the government as a provider of old age security through generous retirement benefits.
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