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Demographic Change and Public Education Spending: A Conflict between Young and Old?

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  • Ueli Grob
  • Stefan C. Wolter

Abstract

Demographic change in industrial countries will influence educational spending in potentially two ways. On the one hand, the decline in the number of school-age children should alleviate the financial pressure. On the other hand, the theoretical/empirical literature has established that the concomitantly increasing proportion of elderly in the population can influence the propensity of politicians to spend on education. Using a panel of the Swiss Cantons for the period from 1990 to 2002, we find that the education system has exhibited little elasticity in adjusting to changes in the school-age population, and that the share of the elderly population has a significantly negative influence on the willingness to spend on public education.

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File URL: http://www.tandfonline.com/10.1080/09645290701273467
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Bibliographic Info

Article provided by Taylor & Francis Journals in its journal Education Economics.

Volume (Year): 15 (2007)
Issue (Month): 3 ()
Pages: 277-292

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Handle: RePEc:taf:edecon:v:15:y:2007:i:3:p:277-292

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Related research

Keywords: Public finance; education finance; demographics; panel estimates; Switzerland;

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References

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  1. Gradstein, Mark & Kaganovich, Michael, 2004. "Aging population and education finance," Journal of Public Economics, Elsevier, vol. 88(12), pages 2469-2485, December.
  2. Alesina, Alberto & Baqir, Reza & Easterly, William, 1999. "Public goods and ethnic divisions," Policy Research Working Paper Series 2108, The World Bank.
  3. Alexander Kemnitz, 2000. "Social security, public education, and growth in a representative democracy," Journal of Population Economics, Springer, vol. 13(3), pages 443-462.
  4. Ed Baldson & Eric Brunner, 2003. "Intergenerational Conflict and the Political Economy of School Spending," Working papers 2003-24, University of Connecticut, Department of Economics.
  5. Hanushek, Eric A, 1986. "The Economics of Schooling: Production and Efficiency in Public Schools," Journal of Economic Literature, American Economic Association, vol. 24(3), pages 1141-77, September.
  6. James M. Poterba, 1996. "Demographic Structure and the Political Economy of Public Education," NBER Working Papers 5677, National Bureau of Economic Research, Inc.
  7. Kemnitz, Alexander, 1999. " Demographic Structure and the Political Economy of Education Subsidies," Public Choice, Springer, vol. 101(3-4), pages 235-49, December.
  8. Konrad, Kai A, 1995. "Social Security and Strategic Inter-vivos Transfers of Social Capital," Journal of Population Economics, Springer, vol. 8(3), pages 315-26, August.
  9. Ladd, Helen F. & Murray, Sheila E., 2001. "Intergenerational conflict reconsidered: county demographic structure and the demand for public education," Economics of Education Review, Elsevier, vol. 20(4), pages 343-357, August.
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Citations

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Cited by:
  1. Joern Rattsoe & Rune J. Soerensen, 2009. "Grey power and public budgets: Family altruism helps children, but not elderly," Working Paper Series 10009, Department of Economics, Norwegian University of Science and Technology.
  2. Lars-Erik Borge & Jørn Rattsø, 2007. "Young and old competing for public welfare services," Working Paper Series 8607, Department of Economics, Norwegian University of Science and Technology.
  3. Dearmon, Jacob & Grier, Robin, 2011. "Trust and the accumulation of physical and human capital," European Journal of Political Economy, Elsevier, vol. 27(3), pages 507-519, September.
  4. Uschi Backes-Gellner & Johannes Mure, 2008. "The Swiss Leading House on Economics of Education, Firm Behaviour and Training Policies," Economics of Education Working Paper Series 0014, University of Zurich, Institute for Strategy and Business Economics (ISU).
  5. Rattsø, Jørn & Sørensen, Rune J., 2010. "Grey power and public budgets: Family altruism helps children, but not the elderly," European Journal of Political Economy, Elsevier, vol. 26(2), pages 222-234, June.
  6. Anna Montén & Marcel Thum, 2008. "Ageing Municipalities, Gerontocracy and Fiscal Competition," CESifo Working Paper Series 2469, CESifo Group Munich.
  7. Ma. Guillamón & Francisco Bastida & Bernardino Benito, 2013. "The electoral budget cycle on municipal police expenditure," European Journal of Law and Economics, Springer, vol. 36(3), pages 447-469, December.
  8. Ulrich Oberndorfer & Viktor Steiner, 2007. "Generationen- oder Parteienkonflikt? Eine empirische Analyse der deutschen Hochschulausgaben," Perspektiven der Wirtschaftspolitik, Verein für Socialpolitik, vol. 8(2), pages 165-183, 03.
  9. Francisco Martínez-Mora, 2009. "Population ageing, inequality and the political economy of public education," Discussion Papers in Economics 09/3, Department of Economics, University of Leicester.
  10. Alejandra Cattaneo & Stefan C. Wolter, 2007. "Are The Elderly A Threat To Educational Expenditures?," Economics of Education Working Paper Series 0003, University of Zurich, Institute for Strategy and Business Economics (ISU).
  11. Marius R. Busemeyer & Maria Alejandra Cattaneo & Stefan C. Wolter, 2011. "Individual policy preferences for vocational versus academic education: Microlevel evidence for the case of Switzerland," Economics of Education Working Paper Series 0068, University of Zurich, Institute for Strategy and Business Economics (ISU).
  12. Vasilaky, Kathryn, 2011. "The effects of school quality on fertility in a transition economy," MPRA Paper 38965, University Library of Munich, Germany.
  13. Busemeyer, Marius R. & Goerres, Achim & Weschle, Simon, 2008. "Demands for redistributive policies in an era of demographic aging: The rival pressures from age and class in 15 OECD countries," MPIfG Discussion Paper 08/3, Max Planck Institute for the Study of Societies.
  14. Sørensen, Rune J., 2013. "Does aging affect preferences for welfare spending? A study of peoples' spending preferences in 22 countries, 1985–2006," European Journal of Political Economy, Elsevier, vol. 29(C), pages 259-271.
  15. Niklas Potrafke, 2006. "Parties Matter in Allocating Expenditures: Evidence from Germany," Discussion Papers of DIW Berlin 652, DIW Berlin, German Institute for Economic Research.
  16. Tosun, Mehmet Serkan, 2008. "Endogenous fiscal policy and capital market transmissions in the presence of demographic shocks," Journal of Economic Dynamics and Control, Elsevier, vol. 32(6), pages 2031-2060, June.
  17. Helmut Seitz & Dirk Freigang & Sören Högel & Gerhard Kempkes, 2007. "Die Auswirkungen der demographischen Veränderungen auf die Budgetstrukturen der öffentlichen Haushalte," Perspektiven der Wirtschaftspolitik, Verein für Socialpolitik, vol. 8(2), pages 147-164, 03.

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