The Greying of the Median Voter
Tilburg University - Center and Faculty of Economics and Business Administration
Erasmus University Rotterdam (EUR) - Faculty of Social Sciences; University of Amsterdam - Amsterdam Institute for Advanced Labour Studies (AIAS)
July 24, 2012
CentER Discussion Paper Series No. 2012-061
Analyzing 30 OECD-countries in 1980-2005, this paper documents the effect of an aging electorate on pension expenditure. The first outcome is that an increase in the age of the median voter leads to less generous pension benefits. The second outcome is that an older median voter is not significantly associated with an increase in pension expenditure relative to GDP. These results do not change when health care costs are considered instead of pension expenditure. The results contradict the main prediction of median voter models that an older median voter will successfully push for higher individual benefits. An alternative specification with the dependency ratio as the operationalization of aging, does show a positive and significant effect of aging on pension expenditure. A positive effect of aging on the generosity of pensions can however also not be found in this case.
Number of Pages in PDF File: 25
Keywords: aging, retirement, political economy
JEL Classification: C23, H55, J18working papers series
Date posted: July 24, 2012
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