Technical Report Pensions, Education, and Growth : A Positive Analysis

Uchida, Yuki  ,  Ono, Tetsuo

14-37-Rev.2pp.1 - 26 , 2016-03 , Graduate School of Economics and Osaka School of International Public Policy (OSIPP) Osaka University
* Revised: [14-37-Rev., 2015]
* Revised: [14-37, 2014]
This study presents an overlapping generations model to capture the nature of the competition between generations regarding two redistribution policies, public education and public pensions. From a political economy viewpoint, we investigate the effects of population aging on these policies and economic growth. We show that greater longevity results in a higher pension-to-GDP ratio. However, an increase in longevity produces an initial increase followed by a decrease in the public education-to-GDP ratio. This, in turn, results in a hump-shaped pattern of the growth rate.

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