Population ageing, inequality and the political economy of public education

Francisco Martínez-Mora

No 09/3, Discussion Papers in Economics from Division of Economics, School of Business, University of Leicester

Abstract: Population ageing has triggered concerns about the sustainability of public systems of education. The empirical evidence is still inconclusive, whereas some theoretical results present a somewhat optimistic view (Gradstein and Kaganovich, 2004; Levy, 2005). The present note re-examines the political economy of public education in an ageing society, using the classical median voter model. The normative analysis shows that elderly households introduce distortions that render political outcomes inefficient except in rare circumstances. It is then explained that the interplay among the political and financial consequences of ageing gives rise to a non-linear, and possibly non-monotonic (inverted-U shaped) relationship between spending per pupil and the share of childless households in the population. Income inequality is shown to play a crucial role of in the process, revealing that ageing has a stronger tendency towards underprovision in economies with high inequality. The implications for the empirical literature are discussed.

Keywords: population ageing; income inequality; median voter model; public education (search for similar items in EconPapers)
JEL-codes: I20 J10 (search for similar items in EconPapers)
Date: 2009-01
New Economics Papers: this item is included in nep-age, nep-edu and nep-pol
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Working Paper: Population Ageing, Inequality and the Political Economy of Public Education (2009)
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