Is Gerontocracy Harmful for Growth? A Comparative Study of Seven European Countries
Atella VincenzoCarbonari Lorenzo
CEIS Research Paper
We study the relationship between gerontocracy and aggregate economic performance in a simple model where growth is driven by human capital accumulation and productive government spending. We show that less patient lites display the tendency to underinvest in public education and productive government services, and thus are harmful for growth. The damage caused by gerontocracy is mainly due to the lack of long-term delayed return on investments, originated by the lower subjective discount factor. An empirical analysis using public investment in Information and Communication Technologies (ICT) is carried out to test theoretical predictions across different countries and different economic sectors. The econometric results confirm our main hypotheses.
Keywords: Gerontocracy, Economic Growth and Aggregate Productivity, Education, ICT
JEL codes: J1,O4
Date: Friday, February 8, 2013
Revision Date: Thursday, May 11, 2017