Greying the Budget: Ageing and Preferences over Public Policies

Abstract

Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. The Institute for the Study of Labor (IZA) in Bonn is a local and virtual international research center and a place of communication between science, politics and business. IZA is an independent nonprofit organization supported by Deutsche Post Foundation. The center is associated with the University of Bonn and offers a stimulating research environment through its international network, workshops and conferences, data service, project support, research visits and doctoral program. IZA engages in (i) original and internationally competitive research in all fields of labor economics, (ii) development of policy concepts, and (iii) dissemination of research results and concepts to the interested public. Terms of use: Documents in D I S C U S S I O N P A P E R S E R I E S Greying the Budget: Ageing and Preferences over Public PoliciesIZA Discussion Papers often represent preliminary work and are circulated to encourage discussion. Citation of such a paper should account for its provisional character. A revised version may be available directly from the author.IZA Discussion Paper No. 9681 January 2016 ABSTRACT Greying the Budget: Ageing and Preferences over Public Policies *This paper looks at how individual preferences for the allocation of government spending change along the life cycle. Using the Life in Transition Survey II for 34 countries of Europe and Central Asia, we find that older individuals are less likely to support a rise in government outlays on education and more likely to support increases in spending on pensions. These results are very similar across countries, and they do not change when using alternative model specifications, estimation methods and data sources. Using repeated cross-sections, we control for cohort effects and confirm our main results. Our findings are consistent with a body of literature arguing that conflict across generations over the allocation of public expenditures may intensify in ageing economies. JEL Classification:H3, H5, J14

ls Ideological Polarisation by Age Group Growing in Europe?

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“…Figure 2 shows the effects by age in a graphical form. Given that older individuals in Europe are significantly more likely to vote than younger people (de Mello, Schotte, Tiongson, & Winkler 2017), these results suggest that increasing inequality may have been a driver of polarization toward the right in regions with a larger share of older people. Empirical evidence shows that older people's preferences regarding public policies are highly affected by intergenerational tensions, as they are more likely to support increases in pension expenditures, but less likely to support public expenditures in education, welfare, and the environment (de Mello et al, 2017).…”

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