دو طرف سیاست انتقال بین نسلی و توسعه اقتصادی: یک رویکرد سیاسی اقتصادی

We consider an overlapping generations model with public education and social security financed by labor income taxation, in which the overall size of these policies is determined in a repeated majority voting game. We investigate the interaction between these policies and economic development in stationary Markov perfect equilibria. In the politico-economic equilibrium, the labor income tax rate is represented as a linear increasing function of the ratio of the decisive voter's human capital and the average human capital level. A high level of initial income inequality reduces the size of public policies and retards economic growth.

This paper considers a situation in which the overall size of public education and pay-as-you-go social security is determined in a repeated majority voting game. In contrast to the existing literature, we focus on stationary Markov perfect equilibria and explicitly investigate the interaction between these public policies and economic development. In nearly every country, the government provides public education. Public education contributes to human capital accumulation, and a large body of literature investigates its effects on economic development.1 Public education is also considered to be a redistribution policy from older to younger generations because it imposes education costs for children on their parents. In democratic countries, the size of public education is determined through political processes. Because public education is a redistribution policy from parental to offspring generations, its sustainability depends on the degree of parental altruism toward their children. If parents are altruistic, they are willing to bear the cost of their children's education, and public education is likely to be sustained. Many studies assume parental altruism in investigating the effects of income inequality on the size of politically implemented public education and economic development (e.g., Glomm and Ravikumar, 1992, Saint-Paul and Verdier, 1993 and Lee and Roemer, 1998).

In this paper, we consider an overlapping generations economy in which the overall size of social security and public education is determined in a repeated majority voting game, and investigate the interaction between politically determined public policies and economic development. In contrast to the existing literature, we focus on a stationary Markov perfect equilibrium and explicitly investigate how the overall size of public policies depends on the economic environment, as well as how these politically determined policies affect the process of economic development. We show that there exists a stationary Markov perfect equilibrium in which the labor income tax rate is represented as a linear increasing function of the ratio of a decisive voter's human capital to the average human capital. In the Markov perfect equilibrium, the average human capital grows at a constant rate, and a high level of initial income inequality retards economic growth because it reduces the size of public policies.