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Financing public education when altruistic agents have retirement concerns

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  • Daniel Montolio

    (Universitat de Barcelona & IEB)

  • Amedeo Piolatto

    (Universitat Autònoma de Barcelona & IEB)

  • Luca Salvadori

    (Universitat Autònoma de Barcelona & TARC & IEB)

Abstract

We study, theoretically and empirically, the link between voters’ suport for public education and pensions when agents are free to choose between public and private education. We show that the (inter-generational) redistributive component in the retirement system creates a link between pensions and education. Specifically, the current investment in education increases future productivity and, hence, future tax proceeds. This channel applies for households that chose private education too. Consequently, the support for publicly financed education grows together with the generosity and degree of redistribution of the retirement system. The empirical analysis uses repeated cross-country surveys to confirm the model predictions.

Suggested Citation

  • Daniel Montolio & Amedeo Piolatto & Luca Salvadori, 2021. "Financing public education when altruistic agents have retirement concerns," Working Papers 2022/01, Institut d'Economia de Barcelona (IEB).
    • Handle: RePEc:ieb:wpaper:doc2022-01
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    Cited by:

    1. Daniel Montolio & Amedeo Piolatto & Luca Salvadori, 2022. "Financing public education when agents have retirement concerns," Economic Inquiry, Western Economic Association International, vol. 60(4), pages 1559-1580, October.
    2. Daniel Montolio & Amedeo Piolatto, 2011. "Financing public education when altruistic agents have retirement concerns," Working Papers 2011/30, Institut d'Economia de Barcelona (IEB).
    3. Daniel Montolio (University of Barcelona (UB) and Barcelona Institute of Economics (IEB)) & Amedeo Piolatto (University of Barcelona (UB) and Barcelona Institute of Economics (IEB)), 2011. "Financing public education when altruistic agents have retirement concerns," Working Papers in Economics 268, Universitat de Barcelona. Espai de Recerca en Economia.
    4. Muinah Fadhilah & Andriyansah, 2017. "Strategic Implementation of Environmentally Friendly Innovation of Small and Medium-Sized Enterprises in Indonesia," European Research Studies Journal, European Research Studies Journal, vol. 0(4B), pages 134-148.
    5. Yuliya Makhdievna Makhdieva, 2017. "Social/Economic Preconditions and Prospects for the Development of Education Insurance in Russia," European Research Studies Journal, European Research Studies Journal, vol. 0(4A), pages 160-174.

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    More about this item

    Keywords

    Public Education; Educational Choice; Pension System; Bismarckian Factor; Majority Voting;
    All these keywords.

    JEL classification:

    • D7 - Microeconomics - - Analysis of Collective Decision-Making
    • H31 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - Household
    • H42 - Public Economics - - Publicly Provided Goods - - - Publicly Provided Private Goods
    • H44 - Public Economics - - Publicly Provided Goods - - - Publicly Provided Goods: Mixed Markets
    • H52 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Education
    • H55 - Public Economics - - National Government Expenditures and Related Policies - - - Social Security and Public Pensions
    • I22 - Health, Education, and Welfare - - Education - - - Educational Finance; Financial Aid

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