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Journal Article

The Birth and Growth of the Social Insurance State: Explaining Old Age and Medical Insurance across Countries

David M. Cutler and Richard Johnson
Public Choice
Vol. 120, No. 1/2 (Jul., 2004), pp. 87-121
Published by: Springer
Stable URL: http://www.jstor.org/stable/30025831
Page Count: 35
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The Birth and Growth of the Social Insurance State: Explaining Old Age and Medical Insurance across Countries
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Abstract

We examine the factors leading to creation and growth of national Old-Age Insurance (OAI) and Health Insurance schemes. None of the theories we test fit the data very well. There is weak evidence that the probability of adopting a system declines in a country's wealth and in the ethnic heterogeneity of its population. Catholic countries are more likely to create earnings-related OAI systems. The growth of OAI spending since 1960 has varied considerably across countries, with fast growth in countries emerging from dictatorship and non-English speaking countries. We conclude that social insurance can be politically expedient for many different reasons.

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