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Aging Population and Education Finance

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  • Gradstein, Mark
  • Kaganovich, Michael

Abstract

Conventional wisdom suggests that aging of population will increase political pressure to tilt the composition of social spending in favour of the elderly, while potentially sacrificing other publicly provided goods such as education. This view seems to be supported by recent empirical findings that per child public education spending tends to be lower in US jurisdictions with higher fraction of elderly residents. Do these cross-sectional findings also carry the dynamic implication that longevity will lead over time to waning political support for funding of public education? This Paper challenges such implication. We present a model that is consistent with the aforementioned cross-sectional regressions yet predicts an overall positive impact of increasing longevity on public education funding and economic growth.

Suggested Citation

  • Gradstein, Mark & Kaganovich, Michael, 2003. "Aging Population and Education Finance," CEPR Discussion Papers 3950, C.E.P.R. Discussion Papers.
    • Handle: RePEc:cpr:ceprdp:3950
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    More about this item

    Keywords

    Local public funding of education; Political equilibrium; Overlapping generations;
    All these keywords.

    JEL classification:

    • D99 - Microeconomics - - Micro-Based Behavioral Economics - - - Other
    • H52 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Education
    • H73 - Public Economics - - State and Local Government; Intergovernmental Relations - - - Interjurisdictional Differentials and Their Effects
    • I22 - Health, Education, and Welfare - - Education - - - Educational Finance; Financial Aid

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