The Greying of the Median Voter

CentER Discussion Paper Series No. 2012-061

25 Pages Posted: 24 Jul 2012

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: July 24, 2012

Abstract

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.

Keywords: aging, retirement, political economy

JEL Classification: C23, H55, J18

Suggested Citation

Hollanders, David and Koster, Ferry, The Greying of the Median Voter (July 24, 2012). CentER Discussion Paper Series No. 2012-061. Available at SSRN: https://ssrn.com/abstract=2116109 or http://dx.doi.org/10.2139/ssrn.2116109

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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