Are Aging OECD Welfare States on the Path to Gerontocracy?

Abstract

Since  the age of the average OECD median voter has increased three times faster than in the preceding  years. We use panel data from - to investigate the effects of population aging on both the program size and the benefit generosity of public pensions in  OECD countries. Population aging is accompanied by cutting smaller slices out of larger cakes: it increases aggregate spending on pensions but freezes or decreases the generosity of individual benefits. Controlling for political, institutional and time-period effects, we find that public pension efforts are significantly mediated by welfare regime type. Moreover, since the late s pension effort has more fully adopted a retrenchment logic. It is the politics of fiscal and electoral straitjackets, not gerontocracy, which shape public pension spending today. While population aging is accelerating, contrary to alarmist political economy predictions democracies are not yet dominated by a new distributive politics of elderly power.

Ideology and redistribution through public spending

“…The more recent studies have shown, however, that the influence of party ideology has decreased over time which has been addressed to a general institutional change that took place in the early 1990s, and that can be explained by the creation of new supranational institutions, and strengthened integration of goods and capital markets (Herwartz and Theilen 2014a). Similar tendencies have been shown, for example, for health care expenditure (Potrafke 2010, Herwartz andTheilen 2014b), pension expenditure (Tepe and Vanhuysse 2009), or education expenditure (Potrafke 2011, Jensen 2011.…”

Does aging affect preferences for welfare spending? A study of peoples' spending preferences in 22 countries, 1985–2006

“…Most empirical studies suggest that the old-age dependency ratio has a positive effect of public spending relative to GDP 5 . However, empirical studies also show that ageing has zero or negative impact on the generosity of pensions and spending per elderly for services aimed at the elderly population (Lindert 1996;Breyer & Craig 1997;Galasso & Profeta 2004;Sanz & Velázquez 2007;Tepe & Vanhuysse 2009). Belonging to a large age group appears to be a political liability.…”

Is German domestic social policy politically controversial?

“…As a consequence, 22 On the political economy of social security see, for example, Breyer (1994) and Galasso and Profeta (2002). Over the period 1980-2002, industrialized democracies have not been dominated by distributive power of the elderly (Tepe and Vanhuysse 2009b). In any event, information increases support for pension reform (Boeri and Tabellini 2011).…”