Gerontocracy Revisited: Unilateral Transfer to the Young May Benefit the Middle-Aged

29 Pages Posted: 1 Aug 2001

See all articles by Panu Poutvaara

Panu Poutvaara

University of Helsinki - Department of Economics; Helsinki Center of Economic Research (HECER); CESifo (Center for Economic Studies and Ifo Institute); IZA Institute of Labor Economics

Date Written: June 2001

Abstract

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 middle-aged 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.

Keywords: Intergenerational Goods, Education, Land, Gerontocracy

JEL Classification: C72, D72, I28, H77

Suggested Citation

Poutvaara, Panu, Gerontocracy Revisited: Unilateral Transfer to the Young May Benefit the Middle-Aged (June 2001). Available at SSRN: https://ssrn.com/abstract=277274 or http://dx.doi.org/10.2139/ssrn.277274

Panu Poutvaara (Contact Author)

University of Helsinki - Department of Economics ( email )

P.O. Box 54
FIN-00014 Helsinki
Finland

HOME PAGE: http://www.valt.helsinki.fi/blogs/poutvaar/

Helsinki Center of Economic Research (HECER) ( email )

FI-00014 Helsinki
Finland

CESifo (Center for Economic Studies and Ifo Institute)

Poschinger Str. 5
Munich, DE-81679
Germany

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

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