On the Political Complementarity between Healt h Care and Social Security ¤ Carlos Bet hencourt Universidad Carlos III de Madrid and Universidad La Laguna Vincenzo Galasso IGIER, Universidad Carlos III de Madrid and CEPR November 2000 A bst r act The dramatic rise in the US social security and public health expenditure is only partially explained by the demographic trend, and may be due to the political comple- mentarity between these two programs. We suggest that public health care increases the political constituency in favor of social security, and viceversa. Speci…cally, public health decreases the longevity di¤erential between low and high-income individuals, therefore rising the retirement period, and the total pension bene… ts of the former relatively to the latter. This increases the political support for social security among the low-income young. We show that in a political equilibrium of a two-dimensional majoritarian elec- tion, a voting majority of low-income young and all retirees supports a large welfare state. Its composition between public health and social security is determined by intermediate (median) income types, who favor a combination of the two programs, since public health increases their longevity enough to make social security more attractive. K eywor ds: Endogenous Longevity, Subgame Perfect Structure Induced Equilibrium. JEL Classi…cation: H53, H55, D72. ¤ Corresponding author: Vincenzo Galasso, Istituto di Economia Politica, Università Bocconi, via Gobbi 5, 20136, M ilano, galasso@eco.uc3m.es. Carlos Bet hencourt : cbet henc@ull.es.