The Graying of the Median Voter Aging and the Politics of the Welfare State in OECD Countries

26 Pages Posted: 7 Feb 2011

See all articles by David Hollanders

David Hollanders

Tilburg University - Tilburg University School of Economics and Management

Ferry Koster

Erasmus University Rotterdam (EUR) - Faculty of Social Sciences

Date Written: January 1, 2011

Abstract

Analyzing 30 OECD‐countries in 1980‐2005, this paper documents the effect of an aging electorate on retirement spending. The first outcome is that an increase in the age of the median voter is not significantly associated with an increase in retirement spending relative to GDP. The second outcome is that a higher age of the median voter leads to lower benefits per retiree. These results do not change when health care costs are considered instead of retirement spending. Health care costs – both relative to GDP and per inhabitant – are not significantly influenced by the age of the median voter. An alternative specification with the dependency ratio as the operationalization of aging, shows a positive and significant effect of aging on retirement spending. A positive effect on the generosity of pensions is also not present in this case. These results contradict the main prediction of median voter models that an older median voter successfully pushes for higher individual benefits.

Keywords: Aging, Retirement, Political Economy

JEL Classification: C23, H55, J18

Suggested Citation

Hollanders, David and Koster, Ferry, The Graying of the Median Voter Aging and the Politics of the Welfare State in OECD Countries (January 1, 2011). Netspar Discussion Paper No. 01/2011-003. Available at SSRN: https://ssrn.com/abstract=1754952 or http://dx.doi.org/10.2139/ssrn.1754952

David Hollanders (Contact Author)

Tilburg University - Tilburg University School of Economics and Management ( email )

P.O. Box 90153
Tilburg, 5000 LE
Netherlands

Ferry Koster

Erasmus University Rotterdam (EUR) - Faculty of Social Sciences ( email )

3000 DR Rotterdam
Netherlands

HOME PAGE: http://www.ferrykoster.nl

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