Is Gerontocracy Harmful for Growth? A Comparative Study of Seven European Countries

CEIS Working Paper No. 263

33 Pages Posted: 9 Feb 2013 Last revised: 13 May 2017

See all articles by Vincenzo Atella

Vincenzo Atella

University of Rome Tor Vergata - Centre for International Studies on Economic Growth (CEIS); Department of Economics and Finance; University of Rome Tor Vergata - Faculty of Economics

Lorenzo Carbonari

Università di Roma "Tor Vergata"

Date Written: August 1, 2013

Abstract

We study the relationship between gerontocracy and aggregate economic performance in a simple model where growth is driven by human capital accumulation and productive government spending. We show that less patient lites display the tendency to underinvest in public education and productive government services, and thus are harmful for growth. The damage caused by gerontocracy is mainly due to the lack of long-term delayed return on investments, originated by the lower subjective discount factor. An empirical analysis using public investment in Information and Communication Technologies (ICT) is carried out to test theoretical predictions across different countries and different economic sectors. The econometric results confirm our main hypotheses.

Keywords: Gerontocracy, Economic Growth and Aggregate Productivity, Education, ICT

JEL Classification: J1, O4

Suggested Citation

Atella, Vincenzo and Carbonari, Lorenzo, Is Gerontocracy Harmful for Growth? A Comparative Study of Seven European Countries (August 1, 2013). CEIS Working Paper No. 263. Available at SSRN: https://ssrn.com/abstract=2213840 or http://dx.doi.org/10.2139/ssrn.2213840

Vincenzo Atella

University of Rome Tor Vergata - Centre for International Studies on Economic Growth (CEIS) ( email )

Via Columbia, 2
Rome, I-00133
Italy
+39 06 72595648 (Phone)

Department of Economics and Finance ( email )

Via Columbia 2
Roma, 00133
Italy

University of Rome Tor Vergata - Faculty of Economics ( email )

Via Columbia n.2
I-00133 Rome, 00133
Italy
+39 06 72595635 (Phone)
+30 06 2020 500 (Fax)

HOME PAGE: http://www.economia.uniroma2.it/sefemeq/professori/atella/

Lorenzo Carbonari (Contact Author)

Università di Roma "Tor Vergata" ( email )

Via Columbia 2
Roma, Lazio 00133
Italy

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