title: Aging and political decision making on public pensions.
abstract: "In this paper decision making on public pensions in a representative democracy is modeled within the framework of the well-known two-overlapping-generations (OLG) general-equilibrium model with rational expectations. The model is used to analyze the effects of aging on the economy in general and on the evolution of public pension schemes in particular, where aging is interpreted as a combination of a decrease in the rate of population growth and an increase in the political influence of pensioners. Analytical results are derived for the long run as well as for the short run by the method of comparative statics and comparative dynamics respectively. It appears that an increase in transfers to the old is not guaranteed if due to aging their political power increases."
mesh_terms: D000367:Age Factors; D001519:Behavior; D003657:Decision Making; D003710:Demography; D004467:Economics; D008962:Models, Theoretical; D009826:Old Age Assistance; D011057:Politics; D011153:Population; D011154:Population Characteristics; D011157:Population Dynamics; D011209:Power, Psychological; D012106:Research
keywords: Age Factors; Behavior; Decision Making; Demographic Aging; Demographic Factors; Economic Development; Economic Factors; Intergenerational Transfers; Microeconomic Factors; Models, Theoretical; Old Age Security; Political Factors; Population; Population Characteristics; Population Dynamics; Power; Research Methodology; World