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Population ageing, inequality and the political economy of public education

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  • Francisco Martínez-Mora

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.

Suggested Citation

  • Francisco Martínez-Mora, 2009. "Population ageing, inequality and the political economy of public education," Discussion Papers in Economics 09/3, Division of Economics, School of Business, University of Leicester.
    • Handle: RePEc:lec:leecon:09/3
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    References listed on IDEAS

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    1. Gradstein, Mark & Kaganovich, Michael, 2004. "Aging population and education finance," Journal of Public Economics, Elsevier, vol. 88(12), pages 2469-2485, December.
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    17. Francisco Martínez-Mora, 2009. "Population ageing, inequality and the political economy of public education," Discussion Papers in Economics 09/3, Division of Economics, School of Business, University of Leicester.
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    1. Francisco Martínez Mora, 2009. "Population Ageing, Inequality and the Political Economy of Public Education," Working Papers 2009-03, FEDEA.

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    More about this item

    Keywords

    population ageing; income inequality; median voter model; public education;
    All these keywords.

    JEL classification:

    • I20 - Health, Education, and Welfare - - Education - - - General
    • J10 - Labor and Demographic Economics - - Demographic Economics - - - General

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