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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.cesifo-group.de/portal/page/portal/DocBase_Content/WP/WP-CESifo_Working_Papers/wp-cesifo-2005/wp-cesifo-2005-10/cesifo1_wp1555.pdf
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Paper provided by CESifo Group Munich in its series CESifo Working Paper Series with number 1555.

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Date of creation: 2005
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Handle: RePEc:ces:ceswps:_1555

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

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References

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  1. Baqir, Reza & Easterly, William & Alesina, Alberto, 1999. "Public Goods and Ethnic Divisions," Scholarly Articles 4551797, Harvard University Department of Economics.
  2. Ladd, Helen F. & Murray, Sheila E., 2001. "Intergenerational conflict reconsidered: county demographic structure and the demand for public education," Economics of Education Review, Elsevier, Elsevier, vol. 20(4), pages 343-357, August.
  3. Gradstein, Mark & Kaganovich, Michael, 2004. "Aging population and education finance," Journal of Public Economics, Elsevier, Elsevier, vol. 88(12), pages 2469-2485, December.
  4. Ed Baldson & Eric Brunner, 2003. "Intergenerational Conflict and the Political Economy of School Spending," Working papers, University of Connecticut, Department of Economics 2003-24, University of Connecticut, Department of Economics.
  5. Konrad, Kai A, 1995. "Social Security and Strategic Inter-vivos Transfers of Social Capital," Journal of Population Economics, Springer, Springer, vol. 8(3), pages 315-26, August.
  6. 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.
  7. James M. Poterba, 1997. "Demographic structure and the political economy of public education," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 16(1), pages 48-66.
  8. Alexander Kemnitz, 2000. "Social security, public education, and growth in a representative democracy," Journal of Population Economics, Springer, Springer, vol. 13(3), pages 443-462.
  9. Kemnitz, Alexander, 1999. " Demographic Structure and the Political Economy of Education Subsidies," Public Choice, Springer, Springer, vol. 101(3-4), pages 235-49, December.
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Citations

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Cited by:
  1. Francisco Martínez Mora, 2009. "Population Ageing, Inequality and the Political Economy of Public Education," Working Papers 2009-03, FEDEA.
  2. Anna Montén & Marcel Thum, 2008. "Ageing Municipalities, Gerontocracy and Fiscal Competition," CESifo Working Paper Series 2469, CESifo Group Munich.
  3. 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, Elsevier, vol. 26(2), pages 222-234, June.
  4. Lars-Erik Borge & Jørn Rattsø, 2008. "Young and Old Competing for Public Welfare Services," CESifo Working Paper Series 2223, CESifo Group Munich.
  5. Joern Rattsoe & Rune J. Soerensen, 2009. "Grey power and public budgets: Family altruism helps children, but not elderly," Working Paper Series, Department of Economics, Norwegian University of Science and Technology 10009, Department of Economics, Norwegian University of Science and Technology.
  6. 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, University of Zurich, Institute for Strategy and Business Economics (ISU) 0014, University of Zurich, Institute for Strategy and Business Economics (ISU).
  7. Vasilaky, Kathryn, 2011. "The effects of school quality on fertility in a transition economy," MPRA Paper 38965, University Library of Munich, Germany.
  8. 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, Verein für Socialpolitik, vol. 8(2), pages 147-164, 03.
  9. Niklas Potrafke, 2006. "Parties Matter in Allocating Expenditures: Evidence from Germany," Discussion Papers of DIW Berlin 652, DIW Berlin, German Institute for Economic Research.
  10. Alejandra Cattaneo & Stefan C. Wolter, 2007. "Are the Elderly a Threat to Educational Expenditures?," CESifo Working Paper Series 2089, CESifo Group Munich.
  11. Dearmon, Jacob & Grier, Robin, 2011. "Trust and the accumulation of physical and human capital," European Journal of Political Economy, Elsevier, Elsevier, vol. 27(3), pages 507-519, September.
  12. 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.
  13. Ma. Guillamón & Francisco Bastida & Bernardino Benito, 2013. "The electoral budget cycle on municipal police expenditure," European Journal of Law and Economics, Springer, Springer, vol. 36(3), pages 447-469, December.
  14. Tosun, Mehmet Serkan, 2008. "Endogenous fiscal policy and capital market transmissions in the presence of demographic shocks," Journal of Economic Dynamics and Control, Elsevier, Elsevier, vol. 32(6), pages 2031-2060, June.
  15. Busemeyer, Marius R. & Cattaneo, Maria Alejandra & Wolter, Stefan C., 2010. "Individual policy preferences for vocational versus academic education micro level evidence for the case of Switzerland," MPIfG Discussion Paper 10/11, Max Planck Institute for the Study of Societies.
  16. 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, Elsevier, vol. 29(C), pages 259-271.
  17. Ulrich Oberndorfer & Viktor Steiner, 2007. "Generationen- oder Parteienkonflikt? Eine empirische Analyse der deutschen Hochschulausgaben," Perspektiven der Wirtschaftspolitik, Verein für Socialpolitik, Verein für Socialpolitik, vol. 8(2), pages 165-183, 03.

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