Social security in a general equilibrium model with endogenous government behavior

In this paper attention is focused on the economic and political effects of an aging population. For that purpose, a general equilibrium model is used that allows for an endogenous analysis of decisionmaking on government policies. We concentrate here on the effects of an aging population on expenditures and levels of social security benefits, the provision of public goods and services, the private output and intergenerational conflicts. Special attention will be paid to the effects of changes in the retirement age and in capital endowments. Furthermore, the effects of issues related to aging, as changes in the political influence structure and the motive of other-directedness by others, are investigated.The authors are grateful to the participants of the ISPE conference. They wish to thank in particular the discussants Jean Frijns, Pierre Pestieau and Harry van Dalen for their helpful comments.