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On the Political Economy of Social Security and Public Education

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  • Panu Poutvaara

    (CEBR)

Abstract

I analyze simultaneous voting on the wage tax rate and investment in public education using a model with three overlapping generations and ability differences inside each cohort. Wage tax revenue finances public education and social security benefits. I derive the results both for a once-and-for-all voting system with commitment and for repeated voting. My model allows demographic change and productivity growth. Even when cohorts are of the same size, the median voter may be a young uneducated citizen.

Suggested Citation

  • Panu Poutvaara, 2003. "On the Political Economy of Social Security and Public Education," Public Economics 0303001, University Library of Munich, Germany.
    • Handle: RePEc:wpa:wuwppe:0303001
    Note: Type of Document - Pdf; prepared on IBM PC; to print on Xerox3N1; pages: 36 ; figures: included. This is a revised version of CESifo Working Paper No. 424 (February 2001) and CEBR Discussion Paper 2002-02.
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    References listed on IDEAS

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    More about this item

    Keywords

    Social security; Public education; Voting; Implicit intergenerational contract; Structure-induced equilibrium;
    All these keywords.

    JEL classification:

    • H52 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Education
    • H55 - Public Economics - - National Government Expenditures and Related Policies - - - Social Security and Public Pensions
    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior

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