Productivity growth and the political economy of social security

The present paper provides an analysis of unfunded social security as the o utcome of a public decision making process in an endogenous growth economy. It employs a model in which there is a non-monotonic relationship beween p roductivity growth and the scale of public intergenerational redistribution . The paper shows that although unfunded social security need not harm grow th in general, it is likely to harm growth in a democracy. This effect is r einforced by population aging.