Full Citation

Title: Population Aging and Preferences for Government Investments and Public Debt

Citation Type: Miscellaneous

Publication Year: 2023

ISBN:

ISSN:

DOI: 10.2139/SSRN.4321243

NSFID:

PMCID:

PMID:

Abstract: Does population aging fuel or hinder support for long-term public investments? Existing theories associate seniors with shorter time horizons but a higher inclination towards borrowing, yielding contradictory predictions of their support for debt-funded investments. I study the effect of aging on approval for real public investments using novel data sets on U.S. state and local bond referendums over six decades. Aging decreases approval for investments because it lowers support for lengthier policies. By contrast, aging does not make communities prefer policies funded by debt rather than taxation. Aging also shifts collective policy preferences, creating tensions between age groups on which policies to fund. Hence, communities with higher age heterogeneity present lower support for investments, especially when aging communities experience an influx of children. Intergenerational contact within families does not alleviate conflicts. These findings suggest that population aging can complicate coalition building around investments, particularly in communities with diverse age distribution.

Url: https://papers.ssrn.com/abstract=4321243

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Authors: Maurel, Arnaud

Publisher: Elsevier BV

Data Collections: IPUMS NHGIS

Topics: Aging and Retirement

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