This study presents an overlapping generations model to capture the nature of the competition between generations regarding two redistribution policies, public education and public pensions. From a political economy viewpoint, we investigate the e¤ects of population aging on these policies and economic growth. We show that greater longevity results in a higher pension-to-GDP ratio. However, an increase in longevity produces an initial increase followed by a decrease in the public educationto-GDP ratio. This, in turn, results in a hump-shaped pattern of the growth rate.

This study considers the politics of public education policy in an overlappinggenerations model with physical and human capital accumulation. In particular, this study examines how debt and tax financing differ in terms of growth and welfare across generations, as well as which fiscal stance voters support. The analysis shows that the growth rate in debt financing is lower than that in tax financing, and that debt financing creates a tradeoff between the present and future generations. The analysis also shows that debt financing attains slower economic growth than that realized by the choice of a social planner who cares about the welfare of all generations.

No abstract

No abstract

This study considers the politics of public education and its impact on economic growth and welfare across generations. We employ probabilistic voting to demonstrate the generational conflict regarding taxes and spending and show that aging results in a tax burden shift from the retired to the working generation, reduction in public education spending, and ultimately in slowing down economic growth. We subsequently consider a legal constraint that aims to boost education spending: a spending floor for education. This constraint stimulates economic growth but creates a trade-off between current and future generations' welfare. Finally, the quantitative implications of our results are explored by calibrating the model to the Japanese economy.