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Greying the Budget: Ageing and Preferences over Public Policies

Author

Listed:
  • de Mello, Luiz

    (OECD)

  • Schotte, Simone

    (UNU-WIDER)

  • Tiongson, Erwin R.

    (Georgetown University)

  • Winkler, Hernan

    (World Bank)

Abstract

This paper looks at how individual preferences for the allocation of government spending change along the life cycle. Using the Life in Transition Survey II for 34 countries of Europe and Central Asia, we find that older individuals are less likely to support a rise in government outlays on education and more likely to support increases in spending on pensions. These results are very similar across countries, and they do not change when using alternative model specifications, estimation methods and data sources. Using repeated cross-sections, we control for cohort effects and confirm our main results. Our findings are consistent with a body of literature arguing that conflict across generations over the allocation of public expenditures may intensify in ageing economies.

Suggested Citation

  • de Mello, Luiz & Schotte, Simone & Tiongson, Erwin R. & Winkler, Hernan, 2016. "Greying the Budget: Ageing and Preferences over Public Policies," IZA Discussion Papers 9681, Institute of Labor Economics (IZA).
  • Handle: RePEc:iza:izadps:dp9681
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    References listed on IDEAS

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    Cited by:

    1. Bauer, Ann Barbara & Eichenberger, Reiner, 2021. "Worsening workers' health by lowering retirement age: The malign consequences of a benign reform," The Journal of the Economics of Ageing, Elsevier, vol. 18(C).
    2. Lee, R., 2016. "Macroeconomics, Aging, and Growth," Handbook of the Economics of Population Aging, in: Piggott, John & Woodland, Alan (ed.), Handbook of the Economics of Population Aging, edition 1, volume 1, chapter 0, pages 59-118, Elsevier.
    3. Benjamin HILGENSTOCK & Zsóka KÓCZÁN, 2020. "Storm Clouds Ahead? Migration And Labor Force Participation Rates In Europe," Applied Econometrics and International Development, Euro-American Association of Economic Development, vol. 20(2), pages 75-88.
    4. Begoña Álvarez, 2022. "The Best Years of Older Europeans’ Lives," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 160(1), pages 227-260, February.
    5. Day, Creina & Day, Garth, 2021. "Aging, voters and lower income tax: A role for pension design," Economic Modelling, Elsevier, vol. 94(C), pages 560-569.
    6. Antti Saastamoinen & Mika Kortelainen, 2020. "When Does Money Stick in Education? Evidence from A Kinked Grant Rule," Education Finance and Policy, MIT Press, vol. 15(4), pages 708-735, Fall.
    7. Hernan Winkler, 2019. "The effect of income inequality on political polarization: Evidence from European regions, 2002–2014," Economics and Politics, Wiley Blackwell, vol. 31(2), pages 137-162, July.
    8. Ann Barbara Bauer & Reiner Eichenberger, 2018. "Worsening Workers' Health by Lowering Retirement Age: The Malign Consequences of a Benign Reform," CREMA Working Paper Series 2018-02, Center for Research in Economics, Management and the Arts (CREMA).

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    More about this item

    Keywords

    ageing; public spending; cohort effects;
    All these keywords.

    JEL classification:

    • H3 - Public Economics - - Fiscal Policies and Behavior of Economic Agents
    • H5 - Public Economics - - National Government Expenditures and Related Policies
    • J14 - Labor and Demographic Economics - - Demographic Economics - - - Economics of the Elderly; Economics of the Handicapped; Non-Labor Market Discrimination

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