On the Political Economy of Social Security and Public Education

Arbeitspapier

This paper analyzes simultaneous voting on the wage tax rate and investment in public education with three overlapping generations and productivity differences inside each cohort. Wage tax revenue finances public education and social security benefits. The presence of productivity differences introduces a time-consistency problem with repeated voting. This can be solved by trigger strategies which do not punish upward deviations in the wage tax rate. If there are multiple equilibria, then higher tax rates are associated with more education. Surprisingly, the median voter may be a young citizen even when cohorts are of the same size.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: IZA Discussion Papers ; No. 1408

Classification and Topics

• Classification: Wirtschaft ; Social Security and Public Pensions ; National Government Expenditures and Education ; Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
• Subject: social security ; public education ; voting ; Bildungsökonomik ; Berufswahl ; Risiko ; Öffentliche Bildungsausgaben ; Soziale Sicherung ; Lohnsteuer ; Ökonomische Theorie der Demokratie ; Wahlverhalten ; Theorie

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Poutvaara, Panu
• Event: Veröffentlichung
• (who): Institute for the Study of Labor (IZA)
• (where): Bonn
• (when): 2004

Further information

• Handle: http://hdl.handle.net/10419/20706
• Last update: 10.03.2025, 11:42 AM CET