IDEAS home Printed from https://ideas.repec.org/p/osk/wpaper/1110.html
   My bibliography  Save this paper

Solution Concept for Intergenerational Conflict: the Role of Intergenerational Bargaining

Author

Listed:
  • Yusuke Kinai

    (Graduate School of Economics, Osaka University)

Abstract

This paper specifically examines intergenerational conflict and analyzes an overlapping generations model of public goods provision from the viewpoint of time-consistency. Public goods are financed through labor-income and capital-income taxation, thereby distorting savings and the labor supply. Taxes redistribute income across generations in the form of public goods. Under such a situation, there emerge dual intergenerational conflicts: the first is related to the amount of public goods and the second is the tax burden. We then contrast the politico-economic equilibrium with commitment allocation, and analyze the sources of conflict and time-inconsistency, and attempt to resolve such a conflict by introducing the concept of eintergenerational bargaining f. Our main findings are the following. First, taxation derived using Lagrange method fails to be time-consistent. Second, depending on bargainingpower, taxation based on intergenerational bargaining can be time-consistent. Third, we portray the properties of taxation and public goods provision rules based on intergenerational bargaining.

Suggested Citation

  • Yusuke Kinai, 2011. "Solution Concept for Intergenerational Conflict: the Role of Intergenerational Bargaining," Discussion Papers in Economics and Business 11-10, Osaka University, Graduate School of Economics.
    • Handle: RePEc:osk:wpaper:1110
    as

    Download full text from publisher

    File URL: http://www2.econ.osaka-u.ac.jp/library/global/dp/1110.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Grégory De Walque, 2005. "Voting on Pensions: A Survey," Journal of Economic Surveys, Wiley Blackwell, vol. 19(2), pages 181-209, April.
    2. Holtz-Eakin, Douglas & Lovely, Mary E. & Tosun, Mehmet S., 2004. "Generational conflict, fiscal policy, and economic growth," Journal of Macroeconomics, Elsevier, vol. 26(1), pages 1-23, March.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Tetsuo Ono, 2015. "Public education and social security: a political economy approach," Economics of Governance, Springer, vol. 16(1), pages 1-25, February.
    2. Michael Kaganovich & Volker Meier, 2012. "Social Security Systems, Human Capital, and Growth in a Small Open Economy," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 14(4), pages 573-600, August.
    3. Ryo Arawatari & Tetsuo Ono, 2011. "Old-age Social Security vs. Forward Intergenerational Public Goods Provision," Discussion Papers in Economics and Business 11-26-Rev.2, Osaka University, Graduate School of Economics, revised Aug 2013.
    4. Tetsuo Ono, 2014. "Economic Growth and the Politics of Intergenerational Redistribution," Discussion Papers in Economics and Business 14-17-Rev., Osaka University, Graduate School of Economics, revised Sep 2015.
    5. Helmuth Cremer & Jean‐Marie Lozachmeur & Pierre Pestieau, 2008. "Social Security And Retirement Decision: A Positive And Normative Approach," Journal of Economic Surveys, Wiley Blackwell, vol. 22(2), pages 213-233, April.
    6. Leroux, Marie-Louise & Pestieau, Pierre & Racionero, María, 2011. "Voting on pensions: Sex and marriage," European Journal of Political Economy, Elsevier, vol. 27(2), pages 281-296, June.
    7. M.-L. Leroux & P. Pestieau, 2012. "The political economy of derived pension rights," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 19(5), pages 753-776, October.
    8. Hsieh Hsih-chia & Hsieh Pei-gin, 2004. "A Generalized Theory of Monetary and Macroeconomics," Money Macro and Finance (MMF) Research Group Conference 2004 50, Money Macro and Finance Research Group.
    9. Sugimoto, Yoshiaki & Nakagawa, Masao, 2010. "From duty to right: The role of public education in the transition to aging societies," Journal of Development Economics, Elsevier, vol. 91(1), pages 140-154, January.
    10. Tetsuo Ono, 2014. "Intergenerational Politics, Government Debt and Economic Growth," Discussion Papers in Economics and Business 14-23, Osaka University, Graduate School of Economics.
    11. Tosun, Mehmet Serkan, 2008. "Endogenous fiscal policy and capital market transmissions in the presence of demographic shocks," Journal of Economic Dynamics and Control, Elsevier, vol. 32(6), pages 2031-2060, June.
    12. John Creedy & Shuyun May Li & Solmaz Moslehi, 2008. "The Composition of Government Expenditure in an Overlapping Generations Model," Department of Economics - Working Papers Series 1043, The University of Melbourne.
    13. Beetsma, Roel & Komada, Oliwia & Makarski, Krzysztof & Tyrowicz, Joanna, 2021. "The political (in)stability of funded social security," Journal of Economic Dynamics and Control, Elsevier, vol. 133(C).
    14. Mehmet S. Tosun, 2015. "Retiree migration and intergenerational conflict," IZA World of Labor, Institute of Labor Economics (IZA), pages 118-118, January.
    15. Torben M. Andersen, 2023. "Pensions and the Nordic Welfare Model," CESifo Working Paper Series 10321, CESifo.
    16. Ono, Tetsuo & Uchida, Yuki, 2016. "Pensions, education, and growth: A positive analysis," Journal of Macroeconomics, Elsevier, vol. 48(C), pages 127-143.
    17. Ahlfeldt, Gabriel M. & Maennig, Wolfgang & Mueller, Steffen Q., 2022. "The generation gap in direct democracy: Age vs. cohort effects," European Journal of Political Economy, Elsevier, vol. 72(C).
    18. Krzysztof Makarski & Joanna Tyrowicz, 2015. "Political (In)Stability of Social Security Reform," Working Papers 2015-21, Faculty of Economic Sciences, University of Warsaw.
    19. Atsue Mizushima, 2021. "Child labor, social capital, and economic development," Review of Development Economics, Wiley Blackwell, vol. 25(3), pages 1648-1667, August.
    20. Uchida, Yuki & Ono, Tetsuo, 2022. "Politics of Public Education and Pension Reform with Endogenous Fertility," MPRA Paper 114543, University Library of Munich, Germany.

    More about this item

    Keywords

    Dual Intergenerational Conflicts; Intergenerational Bargaining; Time-inconsistency; Modified Public Goods Provision Rule.;
    All these keywords.

    JEL classification:

    • E61 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Policy Objectives; Policy Designs and Consistency; Policy Coordination
    • E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy; Modern Monetary Theory
    • H41 - Public Economics - - Publicly Provided Goods - - - Public Goods

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:osk:wpaper:1110. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: The Economic Society of Osaka University (email available below). General contact details of provider: https://edirc.repec.org/data/feosujp.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.