The Aging Population and the Size of the Welfare State
Assaf Razin (),
Efraim Sadka () and
No 2930, CEPR Discussion Papers from C.E.P.R. Discussion Papers
Data for the United States and countries in Western Europe indicate a negative correlation between the dependency ratio and labour tax rates and the generosity of social transfers, after controlling for other factors that influence the size of the welfare state. This is 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 inter-generational transfers (including old-age social security) and human capital formation which 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.
Keywords: fiscal leakage; overlapping-generations model; pay-as-you-go Tax-transfer system (search for similar items in EconPapers)
JEL-codes: H00 (search for similar items in EconPapers)
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (14) Track citations by RSS feed
Downloads: (external link)
CEPR Discussion Papers are free to download for our researchers, subscribers and members. If you fall into one of these categories but have trouble downloading our papers, please contact us at firstname.lastname@example.org
Journal Article: The Aging Population and the Size of the Welfare State (2002)
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 (2000)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:cpr:ceprdp:2930
Ordering information: This working paper can be ordered from
http://www.cepr.org/ ... ers/dp.php?dpno=2930
Access Statistics for this paper
More papers in CEPR Discussion Papers from C.E.P.R. Discussion Papers Centre for Economic Policy Research, 33 Great Sutton Street, London EC1V 0DX.
Bibliographic data for series maintained by ().