%0 Report
        %A Poutvaara, Panu
        %T On the Political Economy of Social Security and Public Education
        %D 2004
        %8 2004 Nov
        %I Institute of Labor Economics (IZA)
        %C Bonn
        %7 IZA Discussion Paper
        %N 1408
        %U https://www.iza.org/publications/dp1408
        %X This paper analyzes simultaneous voting on the wage tax rate and investment in public
education with three overlapping generations and productivity differences inside each cohort.
Wage tax revenue finances public education and social security benefits. The presence of
productivity differences introduces a time-consistency problem with repeated voting. This can
be solved by trigger strategies which do not punish upward deviations in the wage tax rate. If
there are multiple equilibria, then higher tax rates are associated with more education.
Surprisingly, the median voter may be a young citizen even when cohorts are of the same
size.
        %K social security
%K public education
%K voting