Gerontocracy Revisited: Unilateral Transfer to the Young May Benefit the Middle-aged

Panu Poutvaara

No 275, Discussion Papers from VATT Institute for Economic Research

Abstract: According to conventional wisdom, intergenerational transfers can survive, in the absence of altruism, only if the old are net recipients. I prove that this need not hold in an overlapping generations model with a fixed factor. For example, the middle-aged owning land may gain by providing public education even when they cannot tax the young and when the young face no credit market constraints. This requires that labor is not mobile. Furthermore, establishing public education may benefit only the generation which pays for education twice, first for itself and then for the next generation.

Keywords: Intergenerational goods, Education, Land, Gerontocracy, Economic growth, Taloudellinen kasvu, Public services, Julkiset palvelut, Taxation and Social Transfers, Julkisen talouden rahoitus ja tulonsiirrot, C000 - Mathematical and Quantitative Methods: General, H520 - National Government Expenditures and Education, I200 - Education: General, J120 - Marriage; Marital Dissolution; Family Structure, J620 - Job, Occupational, and Intergenerational Mobility; Promotion, O150 - Economic Development: Human Resources; Human Development; Income Distribution; Migration (nutrition, health, education, fertility, household structure and formation, labor markets), (search for similar items in EconPapers)
Date: 2002
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https://www.doria.fi/handle/10024/148254

Related works:
Journal Article: Gerontocracy revisited: unilateral transfer to the young may benefit the middle-aged (2004)
Working Paper: Gerontocracy revisited: Unilateral transfer to the young may benefit the middle-aged (2004)
Working Paper: Gerontocracy Revisited. Unilateral Transfer to the Young May Benefit the Middle-Aged (2001)
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