Social security reform and the support for public education

• Autores: Iñigo Iturbe-Ormaetxe Cortajarena, Guadalupe Valera
• Localización: Working papers = Documentos de trabajo: Serie AD, Nº. 19, 2004, 27 págs.
• Idioma: inglés
• Enlaces
  • Texto completo (pdf)
• Resumen

  • The provision of pensions for the old and public education for the young represent a large share of public budgets. In most Western countries, current Social Security systems are under a big financial stress. Several reforms have been proposed to solve this problem. This paper deals with the impact that some of these reforms have, through a political process, on publicly financed education. We develop a model linking both public transfer schemes, in which heterogeneous individuals vote the educational tax. Our findings show that most of the proposals that entail a partial privatization of the pension system have a negative impact on public education and, thus, on economic growth.