The Effect of Population Aging on Local School Subsidies in Korea

Sun Go

Korean Economic Review, 2015, vol. 31, 121-144

Abstract: The recent growth in local school subsidies in Korea offers a chance to test the effect of population aging on public education expenditure. In the existing literature, the intergenerational conflict model suggests a negative effect, although a growing number of studies are finding theoretical and empirical evidence of a positive effect. After controlling for the district fixed effect, the analysis of the Korean data shows that the elderly population share has a significant positive effect on the local school subsidy per pupil. This result is robust after instrumenting the real proportion of the elderly population by the predicted proportion, assuming no population mobility, to handle the possible bias caused by Tiebout sorting.

Keywords: Population Aging; Local School Subsidy; Public Education Finance; Demographic Structure (search for similar items in EconPapers)
JEL-codes: H75 I22 (search for similar items in EconPapers)
Date: 2015
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Citations: View citations in EconPapers (1)

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