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Intergenerational Conflict, Partisan Politics, and Public Higher Education Spending: Evidence from the German States

  • Oberndorfer, Ulrich

    ()

    (ZEW Mannheim)

  • Steiner, Viktor

    ()

    (Free University of Berlin)

Registered author(s):

    We analyze potential effects of demographic change and political constellations on higher education spending. In our panel analysis of west German states (Laender) for the period 1985 to 2002 we find empirical evidence for the hypothesis of a negative relationship between demographic aging and spending on public higher education. In contrast to the hypothesis of the classical partisan theory that implies higher public expenditures under leftist parties, we find that governments under conservative parties or a coalition between social democrats and conservatives spend more on public higher education than governments run by the social-democratic party alone.

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    File URL: http://ftp.iza.org/dp2417.pdf
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    Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 2417.

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    Length: 24 pages
    Date of creation: Nov 2006
    Date of revision:
    Handle: RePEc:iza:izadps:dp2417
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    1. James M. Poterba, 1996. "Demographic Structure and the Political Economy of Public Education," NBER Working Papers 5677, National Bureau of Economic Research, Inc.
    2. Nouriel Roubini & Jeffrey Sachs, 1989. "Government Spending and Budget Deficits in the Industrial Economies," NBER Working Papers 2919, National Bureau of Economic Research, Inc.
    3. Rainald Borck, 2008. "Central versus local education finance: a political economy approach," International Tax and Public Finance, Springer, vol. 15(3), pages 338-352, June.
    4. Alesina, Alberto, 1988. "Credibility and Policy Convergence in a Two-Party System with Rational Voters," American Economic Review, American Economic Association, vol. 78(4), pages 796-805, September.
    5. Seitz, Helmut & Freigang, Dirk & Kempkes, Gerhard, 2005. "Demographic Change and Federal Systems: Some Preliminary Results for Germany," Dresden Discussion Paper Series in Economics 07/05, Dresden University of Technology, Faculty of Business and Economics, Department of Economics.
    6. Fernandez, Raquel & Rogerson, Richard, 1997. "The Determinants of Public Education Expenditures: Evidence from the States, 1950-1990," Working Papers 97-16, C.V. Starr Center for Applied Economics, New York University.
    7. 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.
    8. Epple, Dennis & Romano, Richard E, 1996. "Public Provision of Private Goods," Journal of Political Economy, University of Chicago Press, vol. 104(1), pages 57-84, February.
    9. Jochimsen, Beate & Nuscheler, Robert, 2007. "The political economy of the German Länder deficits
      [Die politische Ökonomie der Budgetdefizite der deutschen Bundesländer]
      ," Discussion Papers, Research Unit: Market Processes and Governance SP II 2007-06, Social Science Research Center Berlin (WZB).
    10. Harris, Amy Rehder & Evans, William N. & Schwab, Robert M., 2001. "Education spending in an aging America," Journal of Public Economics, Elsevier, vol. 81(3), pages 449-472, September.
    11. Epple, Dennis & Romano, Richard E., 1996. "Ends against the middle: Determining public service provision when there are private alternatives," Journal of Public Economics, Elsevier, vol. 62(3), pages 297-325, November.
    12. Kemnitz, Alexander, 1999. " Demographic Structure and the Political Economy of Education Subsidies," Public Choice, Springer, vol. 101(3-4), pages 235-49, December.
    13. Niklas Potrafke, 2006. "Parties Matter in Allocating Expenditures: Evidence from Germany," Discussion Papers of DIW Berlin 652, DIW Berlin, German Institute for Economic Research.
    14. Gradstein, Mark & Kaganovich, Michael, 2003. "Aging Population and Education Finance," CEPR Discussion Papers 3950, C.E.P.R. Discussion Papers.
    15. Poterba, James M, 1998. "Demographic Change, Intergenerational Linkages, and Public Education," American Economic Review, American Economic Association, vol. 88(2), pages 315-20, May.
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