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Social Security and Strategic Inter-vivos Transfers of Social Capital

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  • Konrad, Kai A

Abstract

This paper explains public provision of social capital in an overlapping generations model with 'gerontocracy,' without resort to any bequest motive. The old generation has an incentive to provide education and infrastructure because these goods shift the Laffer curve of social security taxation, thereby increasing old-age income in the political equilibrium. The incentive is stronger if population growth is larger. The marginal productivity of social capital in the political equilibrium may exceed or fall short of the marginal productivity of social capital in an efficient allocation.

Suggested Citation

  • Konrad, Kai A, 1995. "Social Security and Strategic Inter-vivos Transfers of Social Capital," Journal of Population Economics, Springer;European Society for Population Economics, vol. 8(3), pages 315-326, August.
    • Handle: RePEc:spr:jopoec:v:8:y:1995:i:3:p:315-26
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    Cited by:

    1. Poutvaara, Panu, 2011. "The expansion of higher education and time-consistent taxation," European Journal of Political Economy, Elsevier, vol. 27(2), pages 257-267, June.
    2. Thum, Claudio & Uebelmesser, Silke, 2003. "Mobility and the Role of Education as a Commitment Device," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 10(5), pages 549-564, September.
    3. Cattaneo, M. Alejandra & Wolter, Stefan C., 2009. "Are the elderly a threat to educational expenditures?," European Journal of Political Economy, Elsevier, vol. 25(2), pages 225-236, June.
    4. Gianko Michailidis & Concepció Patxot & Meritxell Solé, 2019. "Do pensions foster education? An empirical perspective," Applied Economics, Taylor & Francis Journals, vol. 51(38), pages 4127-4150, August.
    5. Poutvaara, Panu, 2007. "Social security incentives, human capital investment and mobility of labor," Journal of Public Economics, Elsevier, vol. 91(7-8), pages 1299-1325, August.
    6. Panu Poutvaara, 2006. "On the political economy of social security and public education," Journal of Population Economics, Springer;European Society for Population Economics, vol. 19(2), pages 345-365, June.
    7. 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.
    8. Kai A. Konrad & Gert Wagner, 2000. "Reform of the Public Pension System in Germany," Discussion Papers of DIW Berlin 200, DIW Berlin, German Institute for Economic Research.
    9. Tetsuo Ono, 2015. "Public education and social security: a political economy approach," Economics of Governance, Springer, vol. 16(1), pages 1-25, February.
    10. Tetsuo Ono, 2014. "Economic Growth and the Politics of Intergenerational Redistribution," Discussion Papers in Economics and Business 14-17, Osaka University, Graduate School of Economics.
    11. Del Rey, Elena & Lopez-Garcia, Miguel-Angel, 2019. "Public education, intergenerational transfers, and fertility," Economics Letters, Elsevier, vol. 179(C), pages 78-82.
    12. 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.
    13. Ueli Grob & Stefan C. Wolter, 2007. "Demographic Change and Public Education Spending: A Conflict between Young and Old?," Education Economics, Taylor & Francis Journals, vol. 15(3), pages 277-292.
    14. Del Rey, Elena & Lopez-Garcia, Miguel-Angel, 2020. "On government-created credit markets for education and endogenous growth," Economic Modelling, Elsevier, vol. 92(C), pages 170-179.
    15. Tim Krieger, 2002. "Intergenerational Redistribution and Labor Mobility: A Survey," FinanzArchiv: Public Finance Analysis, Mohr Siebeck, Tübingen, vol. 58(3), pages 339-361, July.
    16. Dan Anderberg & Helmut Rainer & Kerstin Roeder, 2016. "Family-Specific Investments and Divorce: A Theory of Dynamically Inconsistent Household Behavior," CESifo Working Paper Series 5996, CESifo.
    17. Iñigo Iturbe-Ormaetxe & Guadalupe Valera, 2012. "Social security reform and the support for public education," Journal of Population Economics, Springer;European Society for Population Economics, vol. 25(2), pages 609-634, January.
    18. Alexander Kemnitz & Robert K. von Weizsäcker, 2003. "Bildungsreform in der Demokratie," Vierteljahrshefte zur Wirtschaftsforschung / Quarterly Journal of Economic Research, DIW Berlin, German Institute for Economic Research, vol. 72(2), pages 188-204.
    19. Solé, Meritxell & Souto, Guadalupe & Renteria, Elisenda & Papadomichelakis, Giorgos & Patxot, Concepció, 2020. "Protecting the elderly and children in times of crisis: An analysis based on National Transfer Accounts," The Journal of the Economics of Ageing, Elsevier, vol. 15(C).
    20. Andersson, Fredrik & Konrad, Kai A., 2002. "Taxation and education investment in the tertiary sector [Besteuerung und Bildungsinvestitionen im tertiären Sektor]," Discussion Papers, Research Unit: Market Processes and Governance FS IV 02-17, WZB Berlin Social Science Center.
    21. Kaganovich, Michael & Zilcha, Itzhak, 2012. "Pay-as-you-go or funded social security? A general equilibrium comparison," Journal of Economic Dynamics and Control, Elsevier, vol. 36(4), pages 455-467.
    22. Andersen, Torben M., 2019. "Intergenerational conflict and public sector size and structure: A rationale for debt limits?," European Journal of Political Economy, Elsevier, vol. 57(C), pages 70-88.
    23. Gianko Michailidis & Concepció Patxot, 2018. "Political viability of intergenerational transfers. An empirical application," UB School of Economics Working Papers 2018/370, University of Barcelona School of Economics.
    24. Torben M. Andersen & Joydeep Bhattacharya, 2013. "The Intergenerational Welfare State," CESifo Working Paper Series 4359, CESifo.
    25. Massimo Giannini, 2009. "National vs local funding for education: effects on growth and inequality," International Review of Applied Economics, Taylor & Francis Journals, vol. 23(3), pages 367-385.

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