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Demographic Change and Public Education Spending: A Conflict between Young and Old?

  • Ueli Grob
  • Stefan C. Wolter

Demographic change in industrial countries will influence educational spending in potentially two ways. On the one hand, the decline in the number of school-age children should alleviate the financial pressure. On the other hand, the theoretical/empirical literature has established that the concomitantly increasing proportion of elderly in the population can influence the propensity of politicians to spend on education. Using a panel of the Swiss Cantons for the period from 1990 to 2002, we find that the education system has exhibited little elasticity in adjusting to changes in the school-age population, and that the share of the elderly population has a significantly negative influence on the willingness to spend on public education.

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Paper provided by CESifo Group Munich in its series CESifo Working Paper Series with number 1555.

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Date of creation: 2005
Date of revision:
Handle: RePEc:ces:ceswps:_1555
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  1. Brunner, Eric & Balsdon, Ed, 2004. "Intergenerational conflict and the political economy of school spending," Journal of Urban Economics, Elsevier, vol. 56(2), pages 369-388, September.
  2. Gradstein, Mark & Kaganovich, Michael, 2003. "Aging Population and Education Finance," CEPR Discussion Papers 3950, C.E.P.R. Discussion Papers.
  3. Alesina, Alberto & Baqir, Reza & Easterly, William, 1999. "Public goods and ethnic divisions," Policy Research Working Paper Series 2108, The World Bank.
  4. James M. Poterba, 1997. "Demographic structure and the political economy of public education," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 16(1), pages 48-66.
  5. Kemnitz, Alexander, 1999. " Demographic Structure and the Political Economy of Education Subsidies," Public Choice, Springer, vol. 101(3-4), pages 235-49, December.
  6. Ladd, Helen F. & Murray, Sheila E., 2001. "Intergenerational conflict reconsidered: county demographic structure and the demand for public education," Economics of Education Review, Elsevier, vol. 20(4), pages 343-357, August.
  7. Hanushek, Eric A, 1986. "The Economics of Schooling: Production and Efficiency in Public Schools," Journal of Economic Literature, American Economic Association, vol. 24(3), pages 1141-77, September.
  8. Alexander Kemnitz, 2000. "Social security, public education, and growth in a representative democracy," Journal of Population Economics, Springer, vol. 13(3), pages 443-462.
  9. Konrad, Kai A, 1995. "Social Security and Strategic Inter-vivos Transfers of Social Capital," Journal of Population Economics, Springer, vol. 8(3), pages 315-26, August.
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