Gerontocracy revisited: unilateral transfer to the young may benefit the middle-aged

Abstract

Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. It has been argued that in the absence of altruism, intergenerational transfers can survive only if the old are net recipients. I prove that this need not hold in an over-lapping generations model with a fixed factor. For example, the middleaged owning land may gain by providing public education even when they cannot tax the young. This requires that labor is not mobile. Furthermore, establishing public education may benefit only the generation which pays for education twice, first for itself and then for the next generation. Terms of use: Documents in EconStor may

The Intergenerational Welfare State and The Rise and Fall of Pay‐As‐You‐Go Pensions

“…The conclusion contains some remarks about extending the analysis to closed economies.8 Poutvara (2003) pushes theBecker and Murphy (1988) ideas forward by arguing that even in the absence of altruism, the old may support spending on the young if such action indirectly benefits the old via general equilibrium changes in factor prices (which we do not allow) or the tax base.© 2015 Royal Economic Society.…”

Social Security Reform and Investment in Education: Is There Scope for a Pareto Improvement?

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“…Poutvaara (2003) shows that the presence of intergenerational trade in a …xed factor of production that is complementary to human capital may result in overprovision of public education from the e¢ ciency point of view. In Poutvaara (2003), the current and future working-age generations have an option to decide whether to pay taxes to provide education publicly to the younger generation, or leave investment in education to be decided privately. There are no taxes on land rents.…”