IDEAS home Printed from https://ideas.repec.org/a/spr/jopoec/v9y1996i2p141-58.html
   My bibliography  Save this article

Aging and Political Decision Making on Public Pensions

Author

Listed:
  • Meijdam, Lex
  • Verbon, Harrie A A

Abstract

In this paper decision making on public pensions in a representative democracy is modeled within the framework of the well-known two-overlapping-generations (OLG) general-equilibrium model with rational expectations. The model is used to analyze the effects of aging on the economy in general and on the evolution of public pension schemes in particular, where aging is interpreted as a combination of a decrease in the rate of population growth and an increase in the political influence of pensioners. Analytical results are derived for the long run as well as for the short run by the method of comparative statics and comparative dynamics respectively. It appears that an increase in transfers to the old is not guaranteed if due to aging their political power increases.

Suggested Citation

  • Meijdam, Lex & Verbon, Harrie A A, 1996. "Aging and Political Decision Making on Public Pensions," Journal of Population Economics, Springer;European Society for Population Economics, vol. 9(2), pages 141-158, May.
    • Handle: RePEc:spr:jopoec:v:9:y:1996:i:2:p:141-58
    as

    Download full text from publisher

    To our knowledge, this item is not available for download. To find whether it is available, there are three options:
    1. Check below whether another version of this item is available online.
    2. Check on the provider's web page whether it is in fact available.
    3. Perform a search for a similarly titled item that would be available.

    Other versions of this item:

    References listed on IDEAS

    as
    1. Meijdam, Lex & Verhoeven, Marijn, 1998. "Comparative Dynamics in Perfect-Foresight Models," Computational Economics, Springer;Society for Computational Economics, vol. 12(2), pages 115-124, October.
    2. Kristov, Lorenzo & Lindert, Peter & McClelland, Robert, 1992. "Pressure groups and redistribution," Journal of Public Economics, Elsevier, vol. 48(2), pages 135-163, July.
    3. Paul van den Noord & Richard Herd, 1993. "Pension Liabilities in the Seven Major Economies," OECD Economics Department Working Papers 142, OECD Publishing.
    4. Harrie Verbon & Marijn Verhoeven, 1992. "Decision making on pension schemes under rational expectations," Journal of Economics, Springer, vol. 56(1), pages 71-97, February.
    5. Meijdam, Lex & Verbon, Harrie A A, 1997. "Aging and Public Pensions in an Overlapping-Generations Model," Oxford Economic Papers, Oxford University Press, vol. 49(1), pages 29-42, January.
    6. Cigno, Alessandro, 1992. "Children and Pensions," Journal of Population Economics, Springer;European Society for Population Economics, vol. 5(3), pages 175-183, August.
    7. Boadway, Robin W & Wildasin, David E, 1989. "A Median Voter Model of Social Security," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 30(2), pages 307-328, May.
    8. Hansson, Ingemar & Stuart, Charles, 1989. "Social Security as Trade among Living Generations," American Economic Review, American Economic Association, vol. 79(5), pages 1182-1195, December.
    9. Verbon, Harrie, 1993. "Public Pensions: The Role of Public Choice and Expectations," Journal of Population Economics, Springer;European Society for Population Economics, vol. 6(2), pages 123-135, May.
    10. B. Douglas Bernheim, 1989. "Intergenerational Altruism, Dynastic Equilibria and Social Welfare," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 56(1), pages 119-128.
    11. Blanchard, Olivier Jean & Kahn, Charles M, 1980. "The Solution of Linear Difference Models under Rational Expectations," Econometrica, Econometric Society, vol. 48(5), pages 1305-1311, July.
    12. David M. Cutler & James M. Poterba & Louise M. Sheiner & Lawrence H. Summers, 1990. "An Aging Society: Opportunity or Challenge?," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 21(1), pages 1-74.
    13. repec:fth:harver:1490 is not listed on IDEAS
    14. Blanchet, Didier & Kessler, Denis, 1991. "Optimal Pension Funding with Demographic Instability and Endogenous Returns on Investment," Journal of Population Economics, Springer;European Society for Population Economics, vol. 4(2), pages 137-154, May.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Meijdam, Lex & Verbon, Harrie A A, 1997. "Aging and Public Pensions in an Overlapping-Generations Model," Oxford Economic Papers, Oxford University Press, vol. 49(1), pages 29-42, January.
    2. David De La Croix & Géraldine Mahieu & Alexandra Rillaers, 2004. "How Should the Allocation of Resources Adjust to the Baby Bust?," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 6(4), pages 607-636, October.
    3. Galasso, Vincenzo & Profeta, Paola, 2002. "The political economy of social security: a survey," European Journal of Political Economy, Elsevier, vol. 18(1), pages 1-29, March.
    4. Gonzalez, Francisco M. & Lazkano, Itziar & Smulders, Sjak A., 2018. "Intergenerational altruism with future bias," Journal of Economic Theory, Elsevier, vol. 178(C), pages 436-454.
    5. Francisco M. Gonzalez & Itziar Lazkano & Sjak A. Smulders, 2015. "Future-biased government," Working Papers 1502, University of Waterloo, Department of Economics, revised Oct 2015.
    6. Leers, T. & Meijdam, A.C. & Verbon, H.A.A., 1998. "Ageing and Pension Reform in a Small Open Economy : The Role of Savings Incentives," Discussion Paper 1998-90, Tilburg University, Center for Economic Research.
    7. Harrie Verbon & Marijn Verhoeven, 1992. "Decision making on pension schemes under rational expectations," Journal of Economics, Springer, vol. 56(1), pages 71-97, February.
    8. Wagener, Andreas, 2004. "On intergenerational risk sharing within social security schemes," European Journal of Political Economy, Elsevier, vol. 20(1), pages 181-206, March.
    9. Grégory De Walque, 2005. "Voting on Pensions: A Survey," Journal of Economic Surveys, Wiley Blackwell, vol. 19(2), pages 181-209, April.
    10. Lorz, Jens Oliver, 1999. "The political economy of intra- and intergenerational redistribution with asymmetric information," Kiel Working Papers 904, Kiel Institute for the World Economy (IfW Kiel).
    11. Francisco M. Gonzalez & Itziar Lazkano & Sjak A. Smulders, 2017. "Future-biased Intergenerational Altruism," Working Papers 1703, University of Waterloo, Department of Economics, revised Apr 2017.
    12. Berthold U. Wigger, 2002. "Social Security and Growth in an Altruistic Economy," German Economic Review, Verein für Socialpolitik, vol. 3(1), pages 53-80, February.
    13. Theo Leers & Lex Meijdam & Harrie A. A Verbon, 2001. "The Politics of Pension Reform under Ageing," CESifo Working Paper Series 521, CESifo.
    14. Persson, Torsten & Tabellini, Guido, 2002. "Political economics and public finance," Handbook of Public Economics, in: A. J. Auerbach & M. Feldstein (ed.), Handbook of Public Economics, edition 1, volume 3, chapter 24, pages 1549-1659, Elsevier.
    15. repec:spo:wpmain:info:hdl:2441/2091 is not listed on IDEAS
    16. Leers, T. & Meijdam, A.C. & Verbon, H.A.A., 2001. "The Politics of Pension Reform Under Population Ageing," Other publications TiSEM bb03e411-061a-48e2-8a63-8, Tilburg University, School of Economics and Management.
    17. Daisuke Ikazaki, 2014. "A Human Capital Based Growth Model with Environment and Corruption," Journal of Economic Structures, Springer;Pan-Pacific Association of Input-Output Studies (PAPAIOS), vol. 3(1), pages 1-13, December.
    18. Xiaoyong Cui & Liutang Gong & Xiaojun Zhao & Heng-fu Zou, 2013. "The Z -transform method for multidimensional dynamic economic systems," Applied Economics Letters, Taylor & Francis Journals, vol. 20(11), pages 1081-1088, July.
    19. repec:hal:spmain:info:hdl:2441/2091 is not listed on IDEAS
    20. Marko Köthenbürger & Panu Poutvaara, 2002. "Social Security Reform and Intergenerational Trade: Is there Scope for a Pareto-Improvement?," CESifo Working Paper Series 795, CESifo.
    21. Jacques Le Cacheux & Vincent Touzé, 2002. "Les modèles d'équilibre général calculable à générations imbriquées. Enjeux, méthodes et résultats," Revue de l'OFCE, Presses de Sciences-Po, vol. 80(1), pages 87-113.
    22. Heinrich Hock & David Weil, 2012. "On the dynamics of the age structure, dependency, and consumption," Journal of Population Economics, Springer;European Society for Population Economics, vol. 25(3), pages 1019-1043, July.

    More about this item

    JEL classification:

    • J14 - Labor and Demographic Economics - - Demographic Economics - - - Economics of the Elderly; Economics of the Handicapped; Non-Labor Market Discrimination
    • H55 - Public Economics - - National Government Expenditures and Related Policies - - - Social Security and Public Pensions

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:spr:jopoec:v:9:y:1996:i:2:p:141-58. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.