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The Graying of the Median Voter

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  • Hollanders, D.A.
  • Koster, F.

    (Tilburg University, Center for Economic Research)

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    Abstract

    Abstract: Analyzing 30 OECD-countries in 1980-2005, this paper documents the effect of an aging electorate on pension expenditure. The first outcome is that an increase in the age of the median voter leads to less generous pension benefits. The second outcome is that an older median voter is not significantly associated with an increase in pension expenditure relative to GDP. These results do not change when health care costs are considered instead of pension expenditure. The results contradict the main prediction of median voter models that an older median voter will successfully push for higher individual benefits. An alternative specification with the dependency ratio as the operationalization of aging, does show a positive and significant effect of aging on pension expenditure. A positive effect of aging on the generosity of pensions can however also not be found in this case.

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    Bibliographic Info

    Paper provided by Tilburg University, Center for Economic Research in its series Discussion Paper with number 2012-061.

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    Date of creation: 2012
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    Handle: RePEc:dgr:kubcen:2012061

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    Web page: http://center.uvt.nl

    Related research

    Keywords: aging; retirement; political economy;

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    14. Breyer, Friedrich & Craig, Ben, 1997. "Voting on social security: Evidence from OECD countries," European Journal of Political Economy, Elsevier, vol. 13(4), pages 705-724, December.
    15. Browning, Edgar K, 1975. "Why the Social Insurance Budget Is Too Large in a Democracy," Economic Inquiry, Western Economic Association International, vol. 13(3), pages 373-88, September.
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    17. Phillip Swagel & Efraim Sadka & Assaf Razin, 2002. "The Aging of the Population and the Size of the Welfare State," IMF Working Papers 02/68, International Monetary Fund.
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