Jump to ContentJump to Main Navigation

The B.E. Journal of Theoretical Economics

Editor-in-Chief: Schipper, Burkhard

Ed. by Cervellati, Matteo / Fong, Yuk-fai / Peeters, Ronald / Puzzello , Daniela / Rivas, Javier

2 Issues per year


IMPACT FACTOR increased in 2014: 0.300

SCImago Journal Rank (SJR) 2014: 0.581
Source Normalized Impact per Paper (SNIP) 2014: 0.516
Impact per Publication (IPP) 2014: 0.387

Mathematical Citation Quotient (MCQ) 2014: 0.08

Age Bias in Fiscal Policy: Why Does the Political Process Favor the Elderly?

Sita Nataraj Slavov1

1Occidental College,

Citation Information: Topics in Theoretical Economics. Volume 6, Issue 1, Pages 1–37, ISSN (Online) 1534-598X, DOI: 10.2202/1534-598X.1279, October 2006

Publication History

Published Online:
2006-10-16

Across countries, government expenditures tend to favor the elderly. This paper provides a political economy explanation for this phenomenon. I consider the classic problem of dividing a fixed payoff in an overlapping generations setting. Any share of the payoff can be given to any generation. Using a new solution concept for majority rule in dynamic settings (Bernheim and Slavov, 2006), I demonstrate that policies favoring the old are easier to sustain politically than other policies. This result appears across a broad class of majoritarian institutions and thus reflects general forces at work in the political process. Age bias arises because it is easy to induce the young to support policies favoring the elderly by promising them large rewards later in their lives. On the other hand, older generations cannot be rewarded in a similar manner. This asymmetry helps to generate broad political support for large transfers to older individuals.

Keywords: Political Economy; Intergenerational Transfers; Overlapping Generations; Majority Rule

Citing Articles

Here you can find all Crossref-listed publications in which this article is cited. If you would like to receive automatic email messages as soon as this article is cited in other publications, simply activate the “Citation Alert” on the top of this page.

[1]
SITA NATARAJ SLAVOV
Journal of Public Economic Theory, 2014, Volume 16, Number 2, Page 222
[2]
B. D. BERNHEIM and S. N. SLAVOV
Review of Economic Studies, 2009, Volume 76, Number 1, Page 33

Comments (0)

Please log in or register to comment.