What is the impact of demographic changes on lobbying activities, when two opposite groups compete for obtaining a transfer from each other? This paper compares two lobbying models: good-intensive and time-intensive. Depending on the specification of the political technology of the pressure function, the two models obtain different predictions for the impact of demographic changes on the equilibrium size of the transfer. These results have strong implications for the PAYG social security transfers. If the pressure is good-intensive, an aging population implies a smaller social security transfer. If instead the pressure is time-intensive and it displays decreasing marginal returns to size, aging has a hump-shaped impact on the per capita social security transfer.
Aging and Lobbying: Implications for Social Security
PROFETA, PAOLA ANTONIA
2003
Abstract
What is the impact of demographic changes on lobbying activities, when two opposite groups compete for obtaining a transfer from each other? This paper compares two lobbying models: good-intensive and time-intensive. Depending on the specification of the political technology of the pressure function, the two models obtain different predictions for the impact of demographic changes on the equilibrium size of the transfer. These results have strong implications for the PAYG social security transfers. If the pressure is good-intensive, an aging population implies a smaller social security transfer. If instead the pressure is time-intensive and it displays decreasing marginal returns to size, aging has a hump-shaped impact on the per capita social security transfer.
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