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Is gerontocracy harmful for growth? A comparative study of seven European countries

Author

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  • Vincenzo Atella

    (Università di Roma “Tor Vergata”)

  • Lorenzo Carbonari

    (Università di Roma “Tor Vergata”)

Abstract

We study the relationship between gerontocracy and aggregate economic performance in a simple model where growth is driven by human capital accumulation and productive government spending. We show that less patient élites display the tendency to underinvest in public education and productive government services, and thus are harmful for growth. The damage caused by gerontocracy is mainly due to the lack of long-term delayed return on investments, originated by the lower subjective discount factor. An empirical analysis using public investment in Information and Communication Technologies (ICT) is carried out to test theoretical predictions across different countries and different economic sectors. The econometric results confirm our main hypotheses.

Suggested Citation

  • Vincenzo Atella & Lorenzo Carbonari, 2017. "Is gerontocracy harmful for growth? A comparative study of seven European countries," Journal of Applied Economics, Universidad del CEMA, vol. 20, pages 141-168, May.
  • Handle: RePEc:cem:jaecon:v:20:y:2017:n:1:p:141-168
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    References listed on IDEAS

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    Cited by:

    1. Vincenzo Atella & Lorenzo Carbonari & Paola Samà, 2017. "Hours Worked in Selected OECD Countries: an Empirical Assessment," CEIS Research Paper 412, Tor Vergata University, CEIS, revised 21 Jul 2017.

    More about this item

    Keywords

    gerontocracy; economic growth and aggregate productivity; education; ICT;

    JEL classification:

    • J1 - Labor and Demographic Economics - - Demographic Economics
    • O4 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity

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