On the Political Economy of Social Security and Public Education

Panu Poutvaara

No 1408, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: This paper analyzes simultaneous voting on the wage tax rate and investment in public education with three overlapping generations and productivity differences inside each cohort. Wage tax revenue finances public education and social security benefits. The presence of productivity differences introduces a time-consistency problem with repeated voting. This can be solved by trigger strategies which do not punish upward deviations in the wage tax rate. If there are multiple equilibria, then higher tax rates are associated with more education. Surprisingly, the median voter may be a young citizen even when cohorts are of the same size.

Keywords: social security; public education; voting (search for similar items in EconPapers)
JEL-codes: D72 H52 H55 (search for similar items in EconPapers)
Pages: 21 pages
Date: 2004-11
New Economics Papers: this item is included in nep-pol
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (9)

Published - published in: Journal of Population Economics, 2006, 19 (2), 345-365

Downloads: (external link)
https://docs.iza.org/dp1408.pdf (application/pdf)

Related works:
Journal Article: On the political economy of social security and public education (2006)
Working Paper: On the political economy of social security and public education (2006)
Working Paper: On the Political Economy of Social Security and Public Education (2003)
Working Paper: On the Political Economy of Social Security and Public Education (2001)
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:iza:izadps:dp1408

Ordering information: This working paper can be ordered from
IZA, Margard Ody, P.O. Box 7240, D-53072 Bonn, Germany

Access Statistics for this paper

More papers in IZA Discussion Papers from Institute of Labor Economics (IZA) IZA, P.O. Box 7240, D-53072 Bonn, Germany. Contact information at EDIRC.
Bibliographic data for series maintained by Holger Hinte ().