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Public Education and Social Security: A Political Economy Approach

  • Tetsuo Ono

    ()

    (Graduate School of Economics, Osaka University)

This paper develops an overlapping-generations model with uncertain lifetimes and altruism towards children. The paper characterizes a Markov perfect political equilibrium of voting over two conflicting policy issues, public education for the young and social security for the elderly. The model derives multiple indeterminate political equilibria and demonstrates that the difference between the two equilibria in terms of policies and lifetime utility depends on longevity. In particular, the model prediction with respect to the differences in policies and longevity is consistent with the empirical evidence in developed countries.

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Paper provided by Osaka University, Graduate School of Economics and Osaka School of International Public Policy (OSIPP) in its series Discussion Papers in Economics and Business with number 13-06.

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Length: 35 pages
Date of creation: May 2013
Date of revision:
Handle: RePEc:osk:wpaper:1306
Contact details of provider: Web page: http://www.econ.osaka-u.ac.jp/
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