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A Public Choice-Theoretic Test of Ricardian Equivalence

Author

Listed:
  • Jody W. Lipford

    (Presbyterian College)

  • William R. Dougan

    (Clemson University)

Abstract

Despite significant empirical testing, a definitive conclusion on the Ricardian equivalence hypothesis has not been reached. An alternate empirical test examines whether legislators' votes to raise social security benefits are affected by the age compositions of their constituencies. Legislators should be influenced by the age composition of their constituencies only if the effects of the social security program are not offset by intergenerational transfers from parents to their children. Empincal evidence from 1972, when Congress raised social security benefits by 20%, yields no evidence that legislators were influenced by the share of their state or district population aged 45 (or 65) and above. The Ricardian equivalence hypothesis is not rejected.

Suggested Citation

  • Jody W. Lipford & William R. Dougan, 1995. "A Public Choice-Theoretic Test of Ricardian Equivalence," Public Finance Review, , vol. 23(4), pages 467-483, October.
    • Handle: RePEc:sae:pubfin:v:23:y:1995:i:4:p:467-483
    DOI: 10.1177/109114219502300403
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    References listed on IDEAS

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    Cited by:

    1. Maarten Allers & Jakob De Haan & Flip De Kam, 1998. "Using Survey Data To Test for Ricardian Equivalence," Public Finance Review, , vol. 26(6), pages 565-582, November.
    2. Casey B. Mulligan & Xavier Sala-i-Martin, 1999. "Gerontocracy, Retirement, and Social Security," NBER Working Papers 7117, National Bureau of Economic Research, Inc.
    3. Dennis, Christopher & Medoff, Marshall H. & Magnera, Michael, 2008. "Constituents' economic interests and senator support for spending limitations," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 37(6), pages 2443-2453, December.

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