Population Age Structure and the Budget Deficit

The author focuses on the effects of age structure changes on the size of budget deficits of national governments. More specifically, he determines whether differences in age structure can account for the observed differences in budget deficits acr...

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Bibliographic Details
Main Author:	Chen, Derek H. C.
Format:	Policy Research Working Paper
Language:	English en_US
Published:	World Bank, Washington, D.C. 2013
Subjects:	ACCOUNTING ANNUAL OBSERVATIONS BOND ISSUES BORROWING BUDGET DEFICITS BUDGET SURPLUS CENTRAL GOVERNMENTS CONSTANT RETURNS TO SCALE CONSUMPTION INCREASES CROWDING OUT DEBT DEBT FINANCING DEBT INTEREST DEBT SERVICING DISPOSABLE INCOME DISTRIBUTION OF INCOME DISTRIBUTION OF WEALTH ECONOMIC DEVELOPMENT ECONOMIC GROWTH ECONOMICS EMPIRICAL EVIDENCE EQUILIBRIUM EVASION EXPORTS FISCAL DEFICITS FISCAL POLICY FULL EMPLOYMENT GDP GDP PER CAPITA GENERAL EQUILIBRIUM MODEL GINI COEFFICIENT GOVERNMENT BONDS GOVERNMENT DEBT GOVERNMENT EXPENDITURES GROWTH RATE HEALTH PROBLEMS IMPORTS INCOME DISTRIBUTION INFLATION INTEREST PAYMENTS INTEREST RATE INTEREST RATES LABOR FORCE LABOR INPUTS LESS DEVELOPED COUNTRIES NATIONAL GOVERNMENTS OPEN ECONOMIES OPTIMIZATION OVERLAPPING GENERATIONS MODEL PER CAPITA INCOME POLITICAL ECONOMY POPULATION GROWTH PRESENT VALUE PRODUCTION FUNCTION PRODUCTIVITY PUBLIC DEBT PUBLIC EXPENDITURE PUBLIC EXPENDITURES PUBLIC GOODS PUBLIC REVENUES REAL GDP REAL INTEREST RATE REDISTRIBUTIVE EFFECTS RETIREMENT SAVINGS SEIGNIORAGE SOCIAL EXPENDITURE TAX TAX COLLECTION TAX REVENUE TAX REVENUES TAX SYSTEMS TAXATION TOTAL REVENUE VOTERS WAGE RATES WAGES WEALTH
Online Access:	http://documents.worldbank.org/curated/en/2004/10/5278714/population-age-structure-budget-deficit http://hdl.handle.net/10986/14232

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Summary:	The author focuses on the effects of age structure changes on the size of budget deficits of national governments. More specifically, he determines whether differences in age structure can account for the observed differences in budget deficits across countries as well as across time. By way of an extension of the untested theory of negative bequest motives advocated by Cukierman and Meltzer (1989), the author argues that the commonly accepted notion that population aging tends to increase the budget deficits of economies is theoretically consistent. However, preliminary results from country and time fixed-effects panel regressions, estimated from 1975 to 1992 over 55 industrial and developing countries, indicate statistical evidence for this postulation is present only in the developing countries but not in the industrial countries.

Population Age Structure and the Budget Deficit

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