The Aging Population and the Size of the Welfare State

Assaf Razin, Efraim Sadka and Phillip Swagel

Journal of Political Economy, 2002, vol. 110, issue 4, 900-918

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 other factors that influence the size of the welfare state are controlled for. This occurs 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 intergenerational transfers (including old-age social security) and human capital formation that 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.

Date: 2002
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (161)

Downloads: (external link)
http://dx.doi.org/10.1086/340780 main text (application/pdf)
Access to the online full text or PDF requires a subscription.

Related works:
Working Paper: The Aging of the Population and the Size of the Welfare State (2002)
Working Paper: The Aging Population and the Size of the Welfare State (2001)
Working Paper: The Aging Population and the Size of the Welfare State (2001)
Working Paper: The Aging Population and the Size of the Welfare State (2000)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ucp:jpolec:v:110:y:2002:i:4:p:900-918

Access Statistics for this article

More articles in Journal of Political Economy from University of Chicago Press
Bibliographic data for series maintained by Journals Division ().