Population Aging and Preferences for Government Investments and Public Debt

67 Pages Posted: 10 Jan 2023 Last revised: 14 Aug 2023

See all articles by Arnaud Maurel

Arnaud Maurel

Columbia University, Department of Political Science

Date Written: January 10, 2023


Does population aging fuel or hinder support for debt-funded investments? Existing theories associate seniors with preferences for consumption-oriented policies but a higher inclination towards borrowing, which leads to contradictory answers to this question. Using novel data sets on U.S. state and local bond referendums over six decades, I show that aging decreases support for debt-funded investments. Contrary to mainstream predictions, an original conjoint survey experiment further demonstrates that seniors do not have a greater preference for policies with longer repayment maturities and shorter benefit periods. Rather, aging lowers support for investments by increasing fiscal conservatism and shifting consumption away from capital-intensive goods. The effect of aging varies depending on which age groups cohabit with seniors. In particular, aging communities experiencing an influx of non-relative children show greater opposition to new investments, while increased contact with relative children has no detectable effect on their support for investments. These findings suggest that population aging can complicate the construction of political coalitions over investments, particularly in communities with diverse age distributions.

Keywords: Population aging, public debt, local politics, American politics

JEL Classification: H63, H74, D90

Suggested Citation

Maurel, Arnaud, Population Aging and Preferences for Government Investments and Public Debt (January 10, 2023). Available at SSRN: https://ssrn.com/abstract=4321243 or http://dx.doi.org/10.2139/ssrn.4321243

Arnaud Maurel (Contact Author)

Columbia University, Department of Political Science ( email )

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United States

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