Working Paper

Dependent children and aged parents: funding education and social security in an aging economy

Abstract: In the last few decades in the United States birth rates have declined and longevity has risen while productivity growth has slowed. Given such changes, the increasing burden of funding programs for the elderly is likely to shift resources away from the young and toward the elderly. This paper uses an overlapping generations framework to examine the effects of tax policies on an aging economy. We find that if the quality of the education system is sufficiently high then shifting tax resources away from social security and toward education is both growth and welfare enhancing.

Status: Published in Journal of Macroeconomics, 24 (2), June 2002, pp. 145-69

Bibliographic Information

Provider: Federal Reserve Bank of St. Louis

Part of Series: Working Papers

Publication Date: 2000

Number: 1995-001