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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 altruism towards children. The paper characterizes a Markov perfect political equilibrium of voting over two policy issues, public education for the young and social security for the old. The model potentially generates two types of political equilibria, and one of them is selected by the government from the viewpoint of maximizing its objective. The paper shows that (i) longevity affects equilibrium selection and relevant policy choices; and (ii) private education as an alternative to public education as well as the concept of Markov perfect political equilibrium are the keys to generate the two types of equilibria.

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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-Rev.

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Length: 29 pages
Date of creation: May 2013
Date of revision: Sep 2013
Handle: RePEc:osk:wpaper:1306r
Contact details of provider: Web page: http://www2.econ.osaka-u.ac.jp/library/global/e_HP/e_g_shiryo.html
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