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Financing public education when agents have retirement concerns
Author(s) -
Montolio Daniel,
Piolatto Amedeo,
Salvadori Luca
Publication year - 2022
Publication title -
economic inquiry
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.823
H-Index - 72
eISSN - 1465-7295
pISSN - 0095-2583
DOI - 10.1111/ecin.13094
Subject(s) - generosity , redistribution (election) , economics , pension system , productivity , labour economics , pension , public education , public funding , public economics , finance , macroeconomics , economic growth , political science , public administration , politics , law
Abstract We study, theoretically and empirically, the link between voters' support for public education and pensions. We show that the (inter‐generational) redistributive component of the retirement system creates a link between current spending on education and future pensions. Specifically, investments in education increase the young's productivity and, hence, future tax proceeds that will finance the current workers' pension. Consequently, the support for publicly financed education grows together with the generosity and degree of redistribution of the retirement system. The empirical analysis uses repeated cross‐country surveys to confirm the model predictions.