Gerontocracy Revisited: Unilateral Transfer to the Young May Benefit the Middle-aged
AbstractAccording to conventional wisdom, intergenerational transfers can survive, in the absence of altruism, only if the old are net recipients. I prove that this need not hold in an overlapping generations model with a fixed factor. For example, the middle-aged owning land may gain by providing public education even when they cannot tax the young and when the young face no credit market constraints. This requires that labor is not mobile. Furthermore, establishing public education may benefit only the generation which pays for education twice, first for itself and then for the next generation.
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Bibliographic InfoPaper provided by Government Institute for Economic Research Finland (VATT) in its series Discussion Papers with number 275.
Date of creation: 22 May 2002
Date of revision:
Other versions of this item:
- Poutvaara, Panu, 2004. "Gerontocracy revisited: unilateral transfer to the young may benefit the middle-aged," Journal of Public Economics, Elsevier, vol. 88(1-2), pages 161-174, January.
- Panu Poutvaara, 2001. "Gerontocracy Revisited. Unilateral Transfer to the Young May Benefit the Middle-Aged," CESifo Working Paper Series 500, CESifo Group Munich.
- O15 - Economic Development, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration
- J12 - Labor and Demographic Economics - - Demographic Economics - - - Marriage; Marital Dissolution; Family Structure
- I20 - Health, Education, and Welfare - - Education - - - General
- C00 - Mathematical and Quantitative Methods - - General - - - General
- J62 - Labor and Demographic Economics - - Mobility, Unemployment, and Vacancies - - - Job, Occupational and Intergenerational Mobility; Promotion
- H52 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Education
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