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Political viability of intergenerational transfers. An empirical application

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  • Gianko Michailidis

    (Universitat de Barcelona)

  • Concepció Patxot

    (Universitat de Barcelona)

Abstract

Public intergenerational transfers (IGTs) may arise because of the failure of private arrangements to provide optimal economic resources for the young and the old. We examine the political sustainability of the system of public IGTs by asking what the outcome would be if the decision per se to reallocate economic resources between generations was put to the vote. By exploiting the particular nature of National Transfer Accounts data – transfers for pensions and education and total public transfers – and the political economy application proposed by Rangel (2003) we show that most developed countries would vote in favor of a joint public education and pension system. Moreover, our results indicate that a system of total public IGTs to the young and elderly would attract substantial political support and, hence, would be politically viable for most countries in the sample.

Suggested Citation

  • Gianko Michailidis & Concepció Patxot, 2018. "Political viability of intergenerational transfers. An empirical application," UB Economics Working Papers 2018/370, Universitat de Barcelona, Facultat d'Economia i Empresa, UB School of Economics.
  • Handle: RePEc:ewp:wpaper:370web
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    File URL: http://hdl.handle.net/2445/119687
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    References listed on IDEAS

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    More about this item

    Keywords

    Intergenerational Transfers; Population Ageing; Pay-As-You-Go Financing; National Transfer Accounts; Political Economy.;
    All these keywords.

    JEL classification:

    • D70 - Microeconomics - - Analysis of Collective Decision-Making - - - General
    • H50 - Public Economics - - National Government Expenditures and Related Policies - - - General
    • J10 - Labor and Demographic Economics - - Demographic Economics - - - General
    • P16 - Economic Systems - - Capitalist Systems - - - Political Economy of Capitalism

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