Aging and the Welfare State: The Role of Young and Old Voting Pivots

Assaf Razin and Efraim Sadka

No 10967, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: An income tax is generally levied on both capital and labor income. The working young bears mostly the burden of the tax on labor income, whereas the retired old, who already acummulated her savings, bears the brunt of the capital income tax. Therefore, there arise two types of conflict in the determination of the income tax: the standard intragenerational conflict between the poor and the rich, and an ntergenerational conflict between the young and the old. The paper studies how aging affects the resolution of these conflicts, and the politico-economic forces that are at play: the changes in the voting pivots and the fiscal leakage from tax payers to transfer recipients.

JEL-codes: E6 H2 (search for similar items in EconPapers)
Date: 2004-12
New Economics Papers: this item is included in nep-mac, nep-pol and nep-pub
Note: AG PE
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Citations: View citations in EconPapers (1)

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