Greying the Budget: Ageing and Preferences Over Public Policies

27 Pages Posted: 22 Jan 2017

See all articles by Luiz R. de Mello

Luiz R. de Mello

OECD

Simone Schotte

German Institute of Global and Area Studies (GIGA)

Erwin R. Tiongson

Georgetown University - Edmund A. Walsh School of Foreign Service (SFS); Institute for the Study of Labor (IZA); University College London - CReAM - Centre for Research and Analysis of Migration; Asian Institute of Management

Hernan Winkler

World Bank

Multiple version iconThere are 3 versions of this paper

Date Written: February 2017

Abstract

This paper looks at how individual attitudes towards the allocation of government spending change along the life cycle. As individuals age and re‐evaluate the benefits and costs of government programs, such as education, healthcare and old‐age pensions, they also influence the level and composition of government spending. Using the Life in Transition Survey II for 34 countries of Europe and Central Asia, we find that older individuals are less likely to support hikes in government outlays on education and more likely to support increases in spending on pensions. These results are very similar across countries, and they do not change when using alternative model specifications, estimation methods and data sources. To our knowledge, this the first paper to provide evidence of the “grey peril” effect for a large group of developed, middle‐income and low‐income economies. Our findings are consistent with a body of literature arguing that conflict across generations over the allocation of government expenditure may intensify in ageing economies.

Suggested Citation

de Mello, Luiz R. and Schotte, Simone and Tiongson, Erwin R. and Winkler, Hernan Jorge, Greying the Budget: Ageing and Preferences Over Public Policies (February 2017). Kyklos, Vol. 70, Issue 1, pp. 70-96, 2017, Available at SSRN: https://ssrn.com/abstract=2903308 or http://dx.doi.org/10.1111/kykl.12131

Luiz R. De Mello (Contact Author)

OECD ( email )

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Simone Schotte

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Georgetown University - Edmund A. Walsh School of Foreign Service (SFS) ( email )

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Hernan Jorge Winkler

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