Abstract.
Aging changes the political power in a democracy in favor of the older generations. With free labor mobility like that of the EU, the success of the gerontocracy is, nevertheless, limited by migration of the young generations. This connection between political voting and voting with the feet is analyzed in a two-country model with overlapping generations. The interregional competition on public pensions yields premium payments which are larger when the young generations' migration decisions take the impact on future pensions into account (strategic migration) than when these decisions are made myopically. The paper also pays attention to migration (in-)efficiency and to the implications of harmonization principles.
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Received: November 1999 / Accepted: July 2001
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ID="*" The paper benefited greatly from discussions at the EEA conference in Santiago de Compostela, the CESifo Workshop on Public Pensions in Munich and seminars in Göttingen, Mainz, and Tellow. We are grateful to many seminar participants, two anonymous referees of Economics of Governance and, in particular, to Paolo Manasse for their valuable comments and creative hints. The usual disclaimer applies.
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Haupt, A., Peters, W. Voting on public pensions with hands and feet. Econ Gov 4, 57–80 (2003). https://doi.org/10.1007/s101010100043
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DOI: https://doi.org/10.1007/s101010100043