The Aging Population and the Size of the Welfare State
24 Pages Posted: 29 Jul 2001 Last revised: 21 Dec 2022
There are 2 versions of this paper
The Aging Population and the Size of the Welfare State
Date Written: July 2001
Abstract
Data for the United States and countries in Western Europe indicate a negative correlation between the dependency ratio and labor tax rates and the generosity of social transfers, after controlling for other factors that influence the size of the welfare state. This is despite the increased political clout of the dependent population implied by the aging of the population. This paper develops an overlapping generations model of intra-and inter-generational transfers (including old-age social security) and human capital formation which addresses this seeming puzzle. We show that with democratic voting, an increase in the dependency ratio can lead to lower taxes or less generous social transfers.
Suggested Citation: Suggested Citation
Do you have negative results from your research you’d like to share?
Recommended Papers
-
The Political Economy of Social Security
By Georges Casamatta, Helmuth Gremer, ...
-
The Aging of the Population and the Size of the Welfare State
By Assaf Razin, Efraim Sadka, ...
-
Social Security, Retirement, and the Single-Mindedness of the Electorate
-
Social Security, Retirement, and the Single-Mindedness of the Electorate
-
The Ageing Population and the Size of the Welfare State
By Assaf Razin, Efraim Sadka, ...
-
Social Security and Retirement in the Netherlands
By Arie Kapteyn and Klaas De Vos