WPS7555

Policy Research Working Paper

7555

Greying the Budget

Ageing and Preferences over Public Policies
Luiz de Mello
Simone Schotte
Erwin R. Tiongson
Hernan Winkler

Europe and Central Asia Region

Office of the Chief Economist
February 2016

Policy Research Working Paper 7555

Abstract
This paper looks at how individual preferences for the
allocation of government spending change along the life
cycle. Using the Life in Transition Survey II for 34 countries in Europe and Central Asia, the study finds that older
individuals are less likely to support a rise in government
outlays on education and more likely to support increases
in spending on pensions. These results are very similar

across countries, and they do not change when using

alternative model specifications, estimation methods, and
data sources. Using repeated cross-sections, the analysis
controls for cohort effects and confirms the main results.
The findings are consistent with a body of literature arguing that conflict across generations over the allocation of
public expenditures may intensify in ageing economies.

This paper is a product of the Office of the Chief Economist, Europe and Central Asia Region. It is part of a larger effort by
the World Bank to provide open access to its research and make a contribution to development policy discussions around
the world. Policy Research Working Papers are also posted on the Web at http://econ.worldbank.org. The authors may be
contacted at hwinkler@worldbank.org.

The Policy Research Working Paper Series disseminates the findings of work in progress to encourage the exchange of ideas about development
issues. An objective of the series is to get the findings out quickly, even if the presentations are less than fully polished. The papers carry the
names of the authors and should be cited accordingly. The findings, interpretations, and conclusions expressed in this paper are entirely those
of the authors. They do not necessarily represent the views of the International Bank for Reconstruction and Development/World Bank and
its affiliated organizations, or those of the Executive Directors of the World Bank or the governments they represent.

Produced by the Research Support Team


GreyingtheBudget:AgeingandPreferencesoverPublicPolicies

LuizdeMello,OECD
SimoneSchotte,GermanInstituteforGlobalandAreaStudies
ErwinR.Tiongson,GeorgetownUniversity
HernanWinkler,WorldBank

Keywords:Ageing,PublicSpending,CohortEffects
JELClassification:H3,H5,J14

TheviewsreportedinthispaperaretheauthorsownanddonotnecessaryreflectthoseoftheOrganizationstheyare
affiliatedwithortheirmembercountries.Twoanonymousrefereesprovidedmanyusefulcomments.
LuizdeMello:Luiz.DEMELLO@oecd.org
SimoneSchotte:simone.schotte@gigahamburg.de
ErwinTiongson:ert@georgetown.edu
HernanWinkler:hwinkler@worldbank.org

1.Introduction
ThecountriesofEuropeandCentralAsiaareageingrapidly.Peopleagedatleast65yearsnowaccount
for12percentofthepopulationinthosecountriesonaverage,against6percentin1950,andthisshare
isexpectedtoreach21percentin2050(Bussoloetal,2015).Thosecountriesareearlystartersina
processthatwilleventuallyaffectmostpartsoftheworldastheymovethroughtheirdemographic
transitions.Populationageinghasmanyimplicationsforpolicy,forinstanceintermsofgovernment
expenditure,becauseindividualpreferencesaretranslatedthroughthepoliticalprocessintoactual
changesinthebasketofpublicgoodsandservicesprovidedbygovernment.Toshedlightonthisissue,
weinvestigateempiricallywhetherindividualpreferencesoverpolicychangeoverthelifecycle.
Themedianvotertheorem,asappliedtotheanalysisofincomeredistributionandfiscalpolicy,provides
usefulguidanceonthisprocessbycomparinghowthebenefitsofprovision,aswellasthecosts,are
distributedamongindividuals.1Thetheoryisparticularlyusefulinlinkingthedistributionofincomeina
societytothelevelofgovernmentspendingonredistributiveprograms,suchastransferstohouseholds,
whilecontrollingforindividualcharacteristicsthatshapepreferencesovergovernmentprovision(de
MelloandTiongson,2006;Keely,andTan,2008).Theideaisthatassocietiesgrowunequal,thegap
betweenmeanandmedianincomesrises,creatinganincentiveforthevoterwithmedianincome,who
setstheagendaundermajorityvoting,topushforhighergovernmentspendingonredistributive
programs.Underprogressivetaxation,themedianvoterbenefitsfromanincrementinredistributive
spending,whileitscostsarebornebywealthiertaxpayers.Empiricalevidenceindeedunderscoresthe
relevanceofthemedianvoter,asopposedtovoterswithincomesinothersegmentsofthedistribution,
fordescribinglocalpublicserviceprovision(BrunnerandRoss,2010).2
Thetheoryalsoshedslightonhowindividualpreferencesoverpolicymaychangewithage,giventhat
thebenefitsandcostsofprovisionofdifferentservicesarelikelytovaryoverthelifecycle.Forexample,
olderindividualsarethemainbeneficiariesofincreasesingovernmentspendingonpensions,whose

SeeLarcinese(2007)forabriefreviewofdifferentapplicationsofthemedianvotertheorem,includinginthe
analysisofincomeredistributionandfiscalpolicy.SeealsoMeltzerandRichard(1981)foranearlyexampleofthe
useofthemedianvotertheoremtoanalyzethesizeofgovernment.
2
Othernonincomefactorsalsomatter,suchastrustingovernmentandideology(RudolphandEvans,2005),
genderandeducationalattainment,andlabourmarketstatus,amongothers.Forasurvey,seeforinstanceAlesina
etal(2011).Stegmueller(2013)providesevidencethatreligiousindividualsarelesslikelytovoteformore
redistribution.

provisioncostsarebornebytheyoungergenerationinapayasyougosystem.3Theelderlyarealso
likelytosupportanincreaseingovernmentspendingonhealthcare,especiallywhenthecostsof
provisioncanbefinancedthroughgeneraltaxation.Ontheotherhand,supportforhigherspendingon
primaryorsecondaryeducationisoftenstrongeramongtheyoungergenerations,whobenefitfrom
provisionfortheirchildren.Crosscountryevidenceindeedhighlightstheimportanceofageasakey
determinantofpreferencesovergovernmentprovision(Busemeyer,GoerresandWeschle,2009).
Whileitisdifficulttoassesstheagespecificbenefitsandcostsofdifferentgovernmentprograms,inthe
caseofeducation,forexample,arisingshareofeldersinthepopulationcanbearguedtoresultinlower
schoolfundingandfallingqualityofeducationservicesahypothesisknownasthegreyperil.Studies
basedonmedianvotertheorysuggestthatageingcreatesanincomeeffectthatleadstolowerspending
oneducationbutwhichisoffsetalmostentirelybyapriceeffectthatmilitatesinfavorofhigher
spendingperstudent(FletcherandKenny,2008).Takenatfacevalue,theempiricalevidenceprovides
littlesolacetopolicymakerswhoexpecthighergovernmentspendingonagerelatedissuestobe
compensatedatleastinpartbylowerspendingoneducationasaresultofpopulationageing.
Despitetheusefulnessofthemedianvotertheoremasabenchmark,theliteraturealsosuggeststhat
motivationotherthanselfinterestmayattenuateoramplifytheimpactofageingonpreferencesover
policy.Asexplainedmorefullybelow,preferencesmaybedrivenbyaltruism,theexternalitiesproduced
byselectedexpenditureprograms,andotherfactors.Furthermore,thelinkbetweenageingand
preferencesismediatedbyelectoralturnout;inotherwords,thepreferencesofoldervotersmaybe
differentfromthepreferencesofnonvoters.4Thenetimpactofageingonexpenditurepreferencesis
thereforeanempiricalquestion.
Inthispaper,weusedatafromtheLifeinTransitionSurveyII(LITSII),whichwascollectedbythe
EuropeanBankforReconstructionandDevelopmentandtheWorldBankinlate2010.LITSIIcovers
almost39,000householdsin34countriesinEuropeandtheformerSovietUnion.Thedatasetprovides
answerstoquestionsonindividualsattitudestopolicy,gaugedintermsoftheirpreferencesfor
allocatinggovernmentspendingtoavarietyofprograms,includinghealthcare,education,pensionsand
assistancetothepoor,aswellasstandardindividualcharacteristicsthatareknowntoaffect

SeeJaimeCastillo(2013)forevidenceonattitudesanddeterminantsofreformofpensionsystemsinEurope
basedonEurobarometerdata.
4
Althoughtherelationshipbetweenturnoutandredistributionhasbeenpreviouslystudied(Larcinese,2007),to
thebestofourknowledgethisisthefirstattempttolinkageing,expenditurepreferencesandelectoralturnout.

preferences.Wedonottestthemedianvotertheorypersebutareinterestedinknowinghow
preferencesovergovernmentspendingonhealthcare,education,pensionsandtransferstopoor
households,whichtogetheraccountforthebulkofprovisioninadvancedeconomies,changeacrossage
groupswhilecontrollingforotherindividualcharacteristics.Indeed,race,demographics,socioeconomic
characteristicsandgenderareimportantdeterminantsofattitudestowardsredistributionand
governmentspendingonsocialwelfare(KeelyandTan,2008).
Oneofourmainfindingsisthatthereisindeedastrongcorrelationbetweenapersonsageandhisor
herpreferencesoverpolicy,whichisinturnreflectedinhowgovernmentsallocatescarcebudgetary
resourcestocompetingprograms.Inparticular,andinlinewithpreviousliterature,wefindthatolder
individualshavestrongerpreferenceforallocatingadditionalgovernmentspendingtohealthcareand
pensions,whereasyoungerpeopletendtosupportadditionalspendingoneducation.Thesefindingsare
alsofairlyhomogeneousamongthecountriescoveredinLITSII.
Second,theeffectofageingonpreferencesoverpolicyisshapedbyparticipationinthepolitical
process.Asbefore,wefindthatolderpeoplearelesslikelythantheiryoungercounterpartstosupport
anincreaseingovernmentspendingoneducation.Inaddition,olderpeoplewhodonotvoteareeven
lesssupportiveofraisingspendingoneducationthanolderpeoplewhodovote.Thesameistruefor
pensions:thepositiverelationshipbetweenageandsupportforincreasingspendingonpensionsisless
pronouncedamongpeoplewhovotethanamongnonvoters.Inotherwords,preferencesoverpolicy
tendtobemorenuancedamongvotersthanamongnonvotersofdifferentagegroups.
Third,thesefindingsarefairlyhomogeneousacrosscountriesanddonotseemtobesolelydrivenby
cohorteffects,ahypothesisthatwetestedusingannualwavesofEurobarometerdatabetween2004
and2011.Inotherwords,thefactthatolderpeoplearemore(less)likelytosupportincreasesin
spendingonpensions(education)isnotdrivenbyagenerationalchange,butbyindividualschanging
theirpreferencesastheygrowolder.Incontrast,thefactthatpreferencesoverspendingonhealthcare
orhousingvarybyageseemstobehighlydrivenbycohorteffectsratherthanalongthelifecycle.
Thepaperisorganizedasfollows.Thenextsectionreviewsthemainfindingsintheliteratureonthe
associationsbetweenageandpreferencesovergovernmentspending.Section3describesthedataset,
theestimationstrategy,themainempiricalfindingsandrobustnesschecks.Section4concludes.

2.AreviewoftheLiterature
Populationageingcouldbringaboutadramaticchangeinthelevelandcompositionofgovernment
spending.Iftheelderlyhaveselfishpreferencestheyarelikelytosupportanincreaseingovernment
pensionsfinancedbytheiryoungerpeersinapayasyougosystem.Likewise,sincealargeshareof
healthcareconsumptionoccursduringthelastyearsoflife(see,forexample,Dormont,Grignonand
Huber,2006;deMelloandTiongson,2009),theelderlyarealsolikelytosupportincreasesin
governmentspendingonhealthandlongtermcare,especiallywhentheadditionalcostscanbe
financedthroughgeneraltaxation.Ontheotherhand,youngerpeopletendtosupportincreasesin
governmentspendingonprimaryandsecondaryeducation,aswellasonclimatechangeadaptationand
mitigationprograms,sincetheyaremorelikelythantheoldergenerationstoreaptheexpectedbenefits
ofthesepolicies.
Despitetheusefulnessofthemedianvotertheoryasabenchmark,selfinterestmaynotbethekey
driverofpreferencesoverpolicy.Forexample,theelderlymayhavealtruisticpreferencestowardsthe
youngerand/orfuturegenerations.Theymayalsobenefitfromexternalitiesassociatedwithhigher
spendingonprogramsthatbenefittheiryoungerpeers(forinstance,ifhigherspendingoneducation
reducescrimeratesandraisesrealestatevalues).Similarly,asnotedbyFullertonandDixon(2010),the
middleagedmaysupportincreasesingovernmentspendingonoldagepensionstohelpeasetheir
burdenofcaringfortheirparents.Inaddition,themedianvotertheoryassumesonedimensionality,
whereasthepolicyspacemaybemultidimensionalandinvolvetradeoffsamongseveralprograms,as
isthecaseinthispaper.
Thereisalargebodyofliteratureontheeffectsofageonpreferencestowardstheallocationof
governmentspending.Crosscountrystudiestendtoshowthatpopulationageingisnotassociatedwith
risinggovernmentexpenditureonpensionsandhealthcare.Forexample,BreyerandCraig(1997)and
TepeandVanhuysse(2010)findthatthemedianageispositivelybutnotsignificantlycorrelatedwith
thelevelofbenefitsperpensioner.Usingdatacoveringalargersetofcountriesandtimehorizons,
HollandersandKoster(2011)alsofindthatageingisnotassociatedwithhigherexpenditureonpensions
andhealthcare.However,withincountries,theresultsaremixed.EvidencefortheUnitedStatesshows
thatahighershareofelderlyresidentsinastateorschooldistrictisindeedassociatedwithlower
spendingoneducation(seePoterba,1997;FletcherandKenny,2008;andHarris,EvansandSchwab,
2011).Incontrast,alargershareofelderlyresidentsatthedistrictlevelintheRepublicofKoreais
associatedwithhigherschoolsubsidies,whichmaybeduetotheelderlyseekingtoimproveproperty
5

values(Go,2015).InNorway,altruismplaysaroleatthelocalgovernmentlevelbutmostlyby
increasingsupportforeducationamongthemiddleagedwhohavechildren,ratherthanthrough
strongersupportforoldagecareamongthemiddleagedwhohaveelderlyparents(Rattsand
Srensen,2010).
Ourpaperiscloserinnaturetoasecondstrandofliteraturethatfocusesonsubjectivepreferencesfor
theallocationofpublicspending,ratherthanonactualoutcomes.5Busemeyer,GoerresandWeschle
(2009)provideathoroughreviewoftheliteratureandreportmixedempiricalfindingsontheeffectsof
ageingonoverallwelfarespending,probablyasaresultofaggregationeffects.Theauthorsfocuson
OECDcountriesandcontributetotheliteraturebyanalyzingdifferentcomponentsofwelfarespending
andbyfocusingonthetotalpopulation,ratherthanjustthelaborforce.Theyfindsignificantdifferences
inpreferencesforredistributionacrossagegroups,particularlyforeducationandpensions,although
thestrengthoftheseagerelateddifferencesvariesacrosscountries.
Theliteraturealsohighlightstheimportanceofcohort,inadditiontotime,effects.FullertonandDixon
(2010)usedatafortheUnitedStatesandlookatthreespendingcategories(healthcare,educationand
socialsecurity)overalongtimespan(19842008).Theyfindevidenceinsupportofthegreyperil
hypothesisforeducation,althoughtheirresultsaremixedforpensionsandhealthcare.Ourpaperis
closelyrelatedtoSorensen(2013),whousesrepeatedcrosssectionsfor22countriesandfindsthat
whentimeandcohorteffectsaretakenintoaccount,elderlypeoplepreferlower(higher)spendingon
education(healthcareandpensions).Theselifecycleeffectsvaryconsiderablyacrosscountries,but
theyaregenerallyquitesmall.OnelimitationofthedatausedbySorensen(2013)isthatthe
alternativesavailableinthequestionnaireforadditionalgovernmentexpenditurearenotmutually
exclusive.Inotherwords,individualscanchoosetoincreaseordecreaseexpenditureinallcategories.In
contrast,inamorerealisticscenarioindividualswouldbefacedwithtradeoffs,sothatincreasing
expenditureinonecategorywouldrequireoffsetsinothers.
Againstthisbackground,ourpapermakesthreecontributionstotheliterature.First,itteststhegrey
perilhypothesisforalargersetofcountries.UsingdatafromLITSII,weusecomparabledatafor34
economies,mostlydevelopingones.Thisisimportant,asmostpapersintheliteraturefocuson
advancedeconomies.Second,eventhoughSorensen(2013)allowsforageandcohorteffects,weuse

Thereisofcoursealargeliteratureshowinghowindividualpreferencesdonotnecessarilytranslateintoactual
policy.SeeforexampleGilensandPage(2015)forarecentexample.

twodifferentsurveyswhereindividualsareaskedtorankmutuallyexclusivealternativesandare
thereforefacedwithexplicitpolicytradeoffs.6Third,weaccountforparticipationinthepolitical
processasamediatingfactorintherelationshipbetweenageingandexpenditurepreferences.Larcinese
(2007)providescompellingevidencethatvoterturnoutaffectsredistributivepreferencesoverall,but
thepossibleeffectsofageingonspendingpreferencesremainsanempiricalquestion.
3.DataandEmpiricalAnalysis
3.1.TheDataSetandDescriptiveStatistics
ThispaperusesdatafromtheLifeinTransitionSurveyII(LITSII),collectedbytheEuropeanBankfor
ReconstructionandDevelopmentandtheWorldBankinlate2010.Almost39,000respondentsin34
countrieswereaskedquestionsabouttheirpreferencesovergovernmentpolicy,theirsubjectivewell
beingandtheirreactionstoeconomicandpoliticalchange.TheSurveycoverscountriesinEastern
EuropeandtheformerSovietUnion,aswellasinWesternEurope.TableA1intheAppendixliststhe
countriesincludedintheSurveyandthenumberofobservationsineachcountry.
Wemeasureindividualpreferencesoverpolicyonthebasisofresponsestothefollowingquestion:In
youropinion,whichofthesefieldsshouldbethefirstandsecondprioritiesforextragovernment
spending?Education,Healthcare,Housing,Pensions,AssistingthePoor,Environment(includingwater
quality),Publicinfrastructure,Other.Wefocusonthepolicyareasthathavebeenselectedasthefirst
orsecondhighestpriorityforgovernmentintervention.
Preliminaryanalysisofthedatashowshowpreferencesoverpolicychangewithageandacross
countries.First,healthcareisthetoppolicypriorityareaforLITSIIrespondents,andeducation,
pensionsandassistancetothepoorarealsolistedasimportantpriorities(Table1).Thesefourpolicy
categorieswillthereforebethefocusofouranalysis.Second,supportforadditionalgovernment
spendingoneducationishigh,butitfallswithage,wheretheconverseistrueforpensions(Figure1).
Third,supportforassistingthepoorisconsistentlyhigheramongcountriesintheBalkansthaninthe
otherregionscoveredinLITSII.Finally,increasinggovernmentexpendituresforenvironmentalpurposes
receivestheleastsupportineveryregion,althoughitisslightlyhigheramongcountriesinWestern
Europe.

Thisisasignificantimprovementovertheexistingliteraturethoughofcourseitstilldoesnotprovidealistofall
possiblespendingprograms,includingdefense.

Thesefindingsconfirmastrongcorrelationbetweenchangesinthedemographicstructureofthe
populationandpreferencesoverpolicy.But,ifvotingpatternsalsovarywithage,theeffectofageingon
thepolicyagendamightbestrengthenedifolderpeoplearealsomorelikelytovote.TheLITSIIdataset
allowsustoshedlightonthisissuetoo:itappearsthattheshareofvoterswhoparticipatedinthelast
election,includingatthelocal,parliamentaryorpresidentiallevels,increaseswithageandplateausat
aroundage60(Figure2).Votingpatternsareverysimilaracrossregions,althoughtheshareofvoters
seemstobeslightlyloweramongthenewmemberStatesoftheEuropeanUnion.
3.2.EconometricModel
Thepreliminaryevidenceanalyzedabovesuggeststhatsupportforincreasingexpenditureincertain
areaschangeswithage.However,thispatterncouldbedrivenbyageingitselforbyotherfactorsthat
alsochangethroughoutthelifecycle.Forexample,ifolderpeopleearnmorethanyoungerpeople,they
mightbemorelikelytouseprivatethanpublicservicesandmaythereforebelesslikelytosupport
increasingpublicspendinginareasthatwillnotbenefitthemdirectly.Underprogressivetaxation,older
peoplemayalsobeunlikelytosupporttheallocationofadditionalspendingtoareasfromwhichthey
wouldderivenoorlimitedbenefit,whilealsobeinglikelytobearthebruntoftheadditionaltaxburden
neededtofinanceadditionalspending.Todealwiththeseissues,weestimatetheeffectofageingon
preferencesoverpolicywhilecontrollingforotherobservableindividualcharacteristics.
WeassumethatindividualisupportstheallocationofadditionalgovernmentspendingtoareaSifthe
latentvariable

isgreaterthanzero:

Latentvariable

1 if y

canbethoughtofasthelevelofutilitythattheindividualderivesfromsupportinga

givenpolicy,whichdependsonhisorherage,asetofindividualtraits andanerrorterm .If is

normallydistributed,thentheprobabilityofsupportingScanbeestimatedusingthefollowingProbit
model:
P S

1 age , , X

ThesetofcovariatesX includeshouseholdpercapitaconsumption,gender,maritalstatus,numberof
children,educationaldummyvariables,employmentstatusandcountrydummyvariables.Theage
8

dummyvariablesaredefinedforthefollowingagegroups:25to34years,35to44years,45to54years
andolderthan54years(theomittedcategoryis18to24years).Ourmaininterestisonthecoefficient
associatedwiththeoldestagegroup.Wechose54yearsastheupperageboundforthisgroupsoasto
haveahighenoughnumberofobservationsintheoldestagebrackettoobtainpreciseestimates.7
Inclusionofcountryeffectsintheestimatingequationisparticularlyimportant.Onthebasisoftheraw
data,thereappearstobesomehomogeneityintheeffectsofageingonpreferencesoverpolicyacross
countries(seeFigure1).However,specificfeaturesofgovernmentprograms,suchasentitlement
criteriaandbenefitgenerosity,arelikelytovaryacrosscountriesandaffecttheincidenceofthe
associatedbenefitsandcostsofprovision,whichaffectindividualpreferencesindifferentcountries.
3.3.EmpiricalResults
Theestimatedcoefficientsofequation(1),reportedinTable2,confirmthenegative(positive)
correlationbetweenageandsupportforallocatingadditionalgovernmentspendingtoeducation
(healthcareandpensions).Morespecifically,thefirstcolumnindicatesthatindividualsolderthan54
yearsare18.3percentlesslikelythantheirpeersyoungerthan25yearstoclaimthateducationisa
priorityforadditionalgovernmentexpenditure.Thefifthcolumnshowsthatindividualsintheoldestage
bracketare30percentmorelikelythantheyoungestgrouptoreportthatpensionsshouldbeapriority
foradditionalgovernmentexpenditure.Theempiricalanalysisalsoshowsthatolderpeople(thoseinthe
highestagegroup)are3.7percentlesslikelytosupportanincreaseingovernmentassistancetothe
poorwhencomparedtotheirpeersintheyoungestagegroup.
Thesignoftheestimatedcoefficientonageisrobusttotheinclusionofcovariates,althoughits
magnitudeisslightlylowerexceptforAssistingthePoor,whosemagnitudebecomeslarger
suggestingthatlifecyclefactors,suchasnumberofchildrenandmaritalstatus,aswellaseducational
attainment,employmentstatusandincome(measuredbyconsumption),areindeedcorrelatedwith
policypreferences.Forexample,individualswithchildrenaremorelikelytosupportanincreasein
publicspendingoneducationandlesslikelytosupportincreasesinspendingonhealthcareand
pensions.Moreeducatedpeoplearemoresupportiveofincreasesinspendingoneducationandhealth
careandlesssupportiveofincreasesinspendingonpensionsandassistancetothepoor.Paidworkers
aremorelikelytosupporthigherspendingoneducationandlesslikelytosupportincreasing

TableA1intheAppendixdisplaysthenumberofindividualsolderthan54andolderthan64inLITSII.

expenditureonpensionsorassistancetothepoor.Richerindividualsaremorelikelytosupporthiking
educationspendingbutarelesslikelytosupportincreasingexpenditureonassistancetothepoor.
Individualsaffiliatedwithapoliticalpartyaremorelikelytosupportincreasingexpenditureonhealth
careandloweringexpenditureonpensions.FormermembersoftheCommunistPartyare20percent
morelikelythanotherstosupportadditionalspendingonhealthcare.Membershipinareligious
organizationisnotcorrelatedwithpolicypreferences.
ThesefindingsarefairlyhomogenousacrossthecountriescoveredinLITSII.Figure3showsthe
estimatedcoefficientsassociatedwiththeagedummyvariableOlderthan54years.Ineverycountry
includedinthesample(exceptforFrance),olderindividualsareless(more)likelytosupportincreasesin
governmentexpenditureoneducation(pensions).Accordingly,olderindividualsaremore(less)likelyto
supportincreasesingovernmentspendingonhealthcare(assistingthepoor)inalmosteverycountry,
butthecoefficientsaremostlynotstatisticallydifferentfromzero.
TableA2showstheestimationresultsusingadifferentdefinitionofthedependentvariable.In
particular,weconsideronlythefirst(insteadofthefirstandsecond)priorityforgovernment
expenditure.Theresultsshowsthateventhoughthepointestimatesaredifferentinsomecases,the
signsandmagnitudesoftheagecoefficientsareverysimilartothosereportedinTable2.Inother
words,theresultsarenotsensitivetothisalternativedefinitionofthedependentvariable.
Basedonthelinkbetweenageingandpreferencesoverpolicy,thenextstepistoassessthepotential
fortranslatingthesepreferencesintoactualpolicythroughparticipationofdifferentagegroupsinthe
politicalprocess.Becauseparticipationinelectionstendstoincreasewithage,asseemstobethecase
onthebasisoftherawdata,thepreferencesofolderindividualsaremorelikelytobereflectedinpolicy
makingthanthoseoftheiryoungerpeers.Toshedmorelightonthispossibility,weinteractedtheage
dummywithanindicatorofparticipationinelections.Theindicatorisdefinedasa01variableto
identifytheindividualssurveyedinLITSIIwhohavevotedinthelatestelection.
Theresults,reportedinTable3,confirmthepreviousfindingsbutalsosuggestthatindividual
preferencesoverpolicyaremoresimilaracrossagegroupsforindividualswhovotethanforthosewho
donot.Asbefore,theestimatedcoefficientsshowthatolderpeoplearelesslikelytosupportincreasing
governmentspendingoneducation.However,olderpeoplewhodonotvoteareevenlesssupportiveof
raisingeducationexpenditurethanolderpeoplewhodovote.Thesamepatternholdsforpensions:the
positiverelationshipbetweenageingandsupportforincreasingspendingonpensionsisless
10

pronouncedamongpeoplewhovotethanamongnonvoters.Inotherwords,whileanageingsociety
mightbeless(more)supportiveofincreasinggovernmentexpendituresoneducation(pensions),these
changesinpreferencesaresmalleramongthosewhoactuallyparticipateintheelectoralprocess.
Table4displaystheaveragecharacteristicsofvotersandnonvotersbyagetoshedlightonwhyvoters
displaymoresimilarpreferencesacrossagegroupsthannonvoters.First,theresultsshowthatvoters
aremorelikelytohavechildrenandtobemarriedthannonvotersineachagegroup.Theyarealso
morelikelytobecollegegraduatesandtobeemployed.Finally,votersaremorelikelythannonvoters
tobeaffiliatedwithreligiousandpoliticalorganizationsandtobeformermembersofcommunist
parties.Onthebasisofthesecharacteristics,itcouldbearguedthatbecausetheyarebettereducated
andmorelikelytobeaffiliatedwithreligiousandpoliticalorganizations,votershavepreferencesover
policythatarebetterinformedandmorestronglyshapedbysocietalratherthansubjective
considerationsthannonvoters,regardlessoftheirage.8Purelylifecyclerelatedconsiderationsmay
thereforeplayalessprominentroleinshapingpreferencesoverpolicyamongvotersthanamongnon
voters.
RobustnessCheck1:CorrelationacrossPolicies
Preferencesovergovernmentexpenditurearelikelytobecorrelatedacrosspolicyareas,andtherefore
soaretheerrortermsacrossthediscretechoicemodels.Ifthisisindeedthecase,estimatingamulti
equationmodelthatexplicitlytakesthiscorrelationintoaccountwouldimprovetheefficiencyofthe
estimates.Tobesure,weestimatedabivariateProbitmodelincorporatingpreferencesoverincreases
ingovernmentexpenditureoneducationandpensions.Table5reportstheempiricalfindings,aswellas
theparameterestimatesofstandardProbitequationsforbotheducationandpensions.Theestimated
correlationcoefficientis0.66andstatisticallydifferentfromzero,suggestingthatpreferencesare
indeedcorrelated.However,thisdoesnotseemtoaffectthecoefficientsassociatedwithage,whichare
verysimilaracrossmodelspecificationsandshowthatolderindividualsareless(more)likelytosupport
raisingexpenditureoneducation(pensions).
RobustnessCheck2:CohortEffects

Thisisconsistentwiththeliteratureonturnoutoverthelastthreedecadesindicatingthatvoterstendtobe
richerandmoreeducated.SeeLarcinese(2007)forempiricalevidence,aswellastheearlyfindingsofWolfinger
andRosenstone(1980)andLijphart(1997).Infact,botholderandyoungervotersalikearericherthantheirnon
votercounterparts.

11

Preferencesoverpolicymightchangenotonlywithagebutalsoacrosscohorts.Forexample,ifyounger
generationsaremoresupportiveofincreasesingovernmentspendingontheenvironment,theymay
alsobemoresupportiveofthesepolicieswhentheygrowoldthanthecurrentgenerationofold
individuals.Inotherwords,theagepatternsthatemergeinacrosssectionalsurveycouldbeamixof
bothlifecycleeffectsandpreferenceschangingacrossgenerations.
Empiricalevidenceunderscorestheimportanceofcontrollingforageorcohorteffects.Toour
knowledge,theonlypaperthatattemptstodisentangleage,cohortandtimeeffectsinattitudes
towardspublicspendingprioritiesinEuropeaneconomiesisSorensen(2013).Usingdatafromthe
InternationalSocialSurveyProgram(ISSP)whichcomprisesfourrepeatedcrosssectionalsample
surveysfortheyears1985,1990,1996and2006covering22countries,16oftheminEuropethe
authorfindsthatpeopledoshifttheirpublicspendingprioritiesoverthelifecycle,butnotbyasmuch
ascrosssectionalagecomparisonswouldsuggest.Inparticular,olderpeopletendtobeless(more)
supportiveofanincrease(decrease)ofgovernmentexpenditureoneducation(pensions)thantheir
youngerpeers.However,controllingforcohorteffectssignificantlyreduces,butnotentirelyeliminates,
theseagepatterns.Asmentionedintheliteraturereviewsectionabove,onelimitationofthedataused
bySorensen(2013)isthatthealternativesavailableinthequestionnaireforadditionalgovernment
expenditurearenotmutuallyexclusive.
Todisentanglecohortsandageeffectsweneedapaneldatasetcoveringasufficientlylongtimeperiod
orapseudopanelofrepeatedcrosssectionaldatathatwouldallowustofollowthesameindividualsor
groupofindividualsovertime.Asfarasweknow,thebestdatasettomeettheserequirementsis
Eurobarometer,fromwhichweuserepeatedcrosssectionswithannualfrequencybetween2004and
2013for27Europeancountries.9Anadvantageofthisdatasetisthatitallowsustostudyperceptions
towardsabroadersetofissues.TheEurobarometersurveyincludesthequestionWhatdoyouthink
arethetwomostimportantissuesfacing(OURCOUNTRY)atthemoment?,andrespondentscan
choosewithinasetof16mutuallyexclusivecategories.Figure4showstheaverageresultsforthetop
choices,10whichincludesgeneralcontextualconsiderations,suchasunemployment,theeconomic
situationandprices,followedbymorespecificsubjectareas,suchascrime,healthcare,pensionsand
immigration.Whilethisquestiondoesnotspecificallytrytogaugepreferencesregardingtheallocation

ThegroupofcountriesincludesNetherlands,Germany,Italy,Luxembourg,Denmark,Ireland,GreatBritain,
Greece,Spain,Portugal,Finland,Sweden,Austria,Cyprus,CzechRepublic,Estonia,Hungary,Latvia,Lithuania,
Malta,Poland,Slovakia,Slovenia,Bulgaria,Romania,TurkeyandCroatia.
10
OthercategoriesincludePublicTransportation,Defense,ForeignAffairs,Others,Dontknow.

12

ofgovernmentexpenditure,itdoesprovideasnapshotofthemainconcernsamongtheresidentsof
Europe.
Westackthesurveysforallyearsandcountriesandestimatethefollowingspecificationofequation(1):
P S,

1 age

,,

,,

,,

,X ,
,,

,,

,,

,,

Inadditiontothevariablesofequation(1),wecontrolforcohortofbirthandsurveyyear.Weconsider
twelve5yearofbirthgroups,startingwiththosebornbetween1925and1929,andmovingontothose
bornbetween1980and1984.Thereisalargeliteratureregardingtheidentificationofage,cohortand
timeeffects(seeSchulhoferWohl,2013;andMcKenzie,2006).Awellknownchallengeinthisliterature
isthatsucheffectscannotbeidentifiedwithoutmakingspecificassumptions,sincetheyareperfectly
collinear.WefollowDeatonandPaxson(1994)andimplementthenormalizationoftimeeffectsby
assumingthattrendsareonlycapturedbycohorteffects,sothatthetimeeffectsareorthogonaltoa
timetrend.
Table6displaystheestimatesofequation(2)withoutcontrollingforcohorteffects,andTable7displays
theestimatesincludingcohortdummyvariables.Tofacilitatethedescriptionoftheresults,Figure5
showstheestimatedcoefficientsofaspecificationthatintroducesageandcohortsinalinearform.The
resultsareconsistentwiththosereportedinTable6andTable7.Theleftpanelshowsthat,consistent
withthefindingsthatemergedfromusingthecrosssectionaldataofLITSII,olderpeoplearemore
likelytoconsiderpensionsandhealthcareaspolicypriorities,whilebeinglesslikelytoconsider
educationasatoppriority.Theresultsalsosuggestthatfightingcrimeisanotherimportantconcernfor
theolderresidentsofEurope.Finally,inflation,taxation,housingandunemploymentseemlessofa
concernamongolderindividuals.
TherightpanelofFigure5showsthat,oncewecontrolforyearofbirth,theestimatesbecomeless
precise,possiblyduetothestrongcorrelationbetweenageandcohort.However,theagepatterns
regardingpreferencesforeducationandpensionsdonotchangeandremainstatisticallysignificant;that
is,individualsaremore(less)likelytoconsiderpensions(education)asapolicypriorityastheybecome
older,andthisisnotdrivenbyacohorteffect.Fightingcrimealsobecomesamoreimportantpolicy
concernthroughoutthelifecycleofEuropeans.Itisimportanttokeepinmindthattheseestimates
mightbeaffectedbyanattenuationbias.However,sincemostcountriesinthesamplearedevelopedor
13

middleincomeeconomies,informationonageandyearofbirthislikelytobereportedpreciselyinthe
survey.
Thefactthatcontrollingforcohorteffectsreducesthemagnitudeofsomeoftheageeffectsshouldnot
besurprising.Someofthecohortsincludedintheanalysisweremarkedbyimportanthistoricalevents
intheregion,suchaseconomiccrises,theSecondWorldWar,postwarreconstruction,theemergence
oftheWelfareState,andtheriseandfallofsocialisminEasternEurope,whichmayhaveshaped
respondentspreferencesregardingtheroleofthegovernmentinsociety.
4.Conclusions
Thispapertestsempiricallytherelationshipbetweenageandpreferencesovertheallocationof
governmentexpenditure.UsingdataforseveralcountriesinEuropeandtheformersocialisteconomies,
wefindthatolderindividualsarelesslikelytoconsidereducation,assistingthepoorandprotectingthe
environmentasprioritiesforadditionalgovernmentspending.Incontrast,theyaremorelikelyto
supporttheallocationofadditionalgovernmentresourcestopensionsandhealthcareaskeypriorities.
Thesefindingarequitesimilaracrosscountries.Participationinelectionsaffectsthelinkbetweenageing
andpreferencestosomeextent,aspreferencesoverpolicytendtobemorenuancedamongvoters
thanamongnonvoters.
Ourresultsarerobusttocontrollingforotherfactorsthatchangeoverthelifecycleandtoaccounting
forthecorrelationbetweenpolicyalternatives.Usingadifferentdataset,wefindconsistentresultsand
showthatthemainfindingsdonotseemtobedrivenbycohortorgenerationaleffects.Toour
knowledge,ourpaperisthefirsttoprovideevidenceofthegreyperileffectforalargegroupof
developedandmiddleincomeeconomies.Inaddition,webuildonSorensen(2013)anddisentangleage
andcohorteffectsbyusingameasureofpolicypreferencesthattakestradeoffsintoaccount.
Accordingtoourresults,ageingsocietiesaremorelikelytochooselowerlevelsofeducationspending.
Theeffectofthischangeonspendingperpupilisnotclear,sincethenumberofstudentsisexpectedto
decreaseasthepopulationages.However,thefactthatageingsocietiesmaychoosehigherlevelsof
pensionspendingmaycreatefiscalpressuresincountrieswithpayasyougosystems.Asaresult,our
resultshighlighttheimportanceofreformingpensionsystems.Ourfindingsalsohighlightthatthereis
somedegreeofheterogeneityacrosscountriesintherelationshipbetweenageandpolicypreferences.
Aninvestigationofthedriversofthesedifferencesisanimportantareaforfutureresearch.

14

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17

Table1.AttitudesTowardsPolicyPrioritiesinEuropeandCentralAsia

Inyouropinion,whichofthesefieldsshouldbethefirstand
secondprioritiesforextragovernmentspending?
Education
Healthcare
Housing
Pensions
AssistingthePoor
Environment
PublicInfrastructures

44.1%
66.0%
18.0%
27.9%
26.7%
8.1%
7.3%

Observations

37,698

SampleincludesallcountriesinLITSII.Samplingweights
reflectcountrysize

18

Table2.MarginalEffectsontheProbabilityofSupportinganIncreaseinGovernmentExpenditures
Probitregression:MarginalEffects
Whichshouldbethefirstorsecondpriorityforextragovernmentspending?
Education
AgeofRespondent(1)
2534
3544
4554
Olderthan54

0.0349**
(0.0162)
0.0258
(0.0166)
0.0826***
(0.0165)
0.1831***
(0.0150)

Healthcare

0.0801***
(0.0172)
0.0743***
(0.0184)
0.1004***
(0.0185)
0.1376***
(0.0185)

Children
Selectedrespondentisfemale
Secondaryeducation
Tertiaryeducation
Workforincome
Logofpercapitaconsumption,PPP
MemberofReligiousOrganization
AffiliatedtoPoliticalParty
FormermemberofCommunistParty

Observations
PseudoR2

0.0643***
(0.0145)
0.0773***
(0.0146)
0.0772***
(0.0149)
0.1057***
(0.0141)

0.0568***
(0.0155)
0.0691***
(0.0164)
0.0639***
(0.0168)
0.1001***
(0.0168)

0.0245
(0.0179)
0.0743***
(0.0201)
0.1459***
(0.0211)
0.2506***
(0.0193)

0.0112
(0.0140)
0.0089
(0.0143)
0.0054
(0.0148)
0.0373***
(0.0136)

0.0052
(0.0152)
0.0066
(0.0164)
0.0111
(0.0170)
0.0530***
(0.0159)

0.0111**
(0.0052)
0.0447***
(0.0088)
0.0557***
(0.0144)
0.0619***
(0.0154)
0.0066
(0.0099)
0.0021
(0.0038)
0.0339***
(0.0115)
0.0025
(0.0218)
0.0192
(0.0233)

0.0328***
(0.0053)
0.0282***
(0.0083)
0.0826***
(0.0128)
0.1703***
(0.0132)
0.0476***
(0.0093)
0.0044
(0.0035)
0.0018
(0.0106)
0.0383*
(0.0197)
0.0325
(0.0210)

0.0067
(0.0047)
0.0098
(0.0080)
0.0664***
(0.0129)
0.1344***
(0.0134)
0.0316***
(0.0091)
0.0126***
(0.0033)
0.0114
(0.0103)
0.0089
(0.0212)
0.0020
(0.0217)

37,197
0.0811

37,306
0.0210

37,698
0.0176

37,211
0.0372

19

0.0107
(0.0160)
0.0331*
(0.0171)
0.1334***
(0.0186)
0.3057***
(0.0163)

AssistingthePoor

0.0368***
(0.0057)
0.0116
(0.0094)
0.1386***
(0.0161)
0.2834***
(0.0166)
0.0333***
(0.0104)
0.0074*
(0.0042)
0.0007
(0.0120)
0.0229
(0.0231)
0.0344
(0.0238)

Standarderrorsinparentheses
***p<0.01,**p<0.05,*p<0.1
Controlsincludecountrydummyvariables

Pensions

Table3.MarginalEffectsontheProbabilityofSupportinganIncreaseinGovernmentExpenditures,
includinginteractionswithvotingbehavior.
Probitregression:MarginalEffects
Whichshouldbethefirstorsecondpriorityforextragovernment
spending?
Assistingthe
Education
Healthcare
Pensions
Poor
AgeofRespondent(1)
2534
3544
4554
Olderthan54

Voted
Voted*2534
Voted*3544
Voted*4554
Voted*Olderthan54

0.1107***
(0.0290)
0.1225***
(0.0310)
0.1532***
(0.0331)
0.2033***
(0.0313)

0.0659**
(0.0260)
0.0840***
(0.0279)
0.0642**
(0.0307)
0.1228***
(0.0279)

0.0423
(0.0308)
0.1505***
(0.0356)
0.1876***
(0.0381)
0.3083***
(0.0315)

0.0392
(0.0267)
0.0167
(0.0282)
0.0592*
(0.0321)
0.0348
(0.0271)

0.0151
(0.0281)
0.0455
(0.0366)
0.0672*
(0.0383)
0.0706*
(0.0411)
0.0785**
(0.0374)

0.0825***
(0.0267)
0.0266
(0.0337)
0.0334
(0.0355)
0.0167
(0.0374)
0.0507
(0.0338)

0.0157
(0.0274)
0.0297
(0.0336)
0.0903***
(0.0312)
0.0504
(0.0343)
0.0673**
(0.0310)

0.0119
(0.0243)
0.0448
(0.0286)
0.0155
(0.0313)
0.0569*
(0.0309)
0.0210
(0.0303)

Observations
36,830
36,940
36,791
36,841
PseudoR2
0.0836
0.0224
0.101
0.0386
Standarderrorsinparentheses
***p<0.01,**p<0.05,*p<0.1
(1)Omittedcategoryis18to24
Controlsincludemaritalstatus,gender,education,workstatus,consumptionpercapita,politicalparty
andreligiousorganizationmembershipandcountrydummyvariables

20

Table4.Characteristicsofvotersandnonvoters

Nevermarried

Children

Selected
respondentis
female

Secondary
education

Tertiary
education

Youngerthan55
55orolder

23%
5%

88%
20%

60%
61%

50%
44%

42%
33%

Youngerthan55
55orolder

36%
7%

74%
17%

59%
66%

56%
44%

35%
24%

Logofpercapita
consumption,
PPP

Memberof
Religious
Organization

Affiliatedto
PoliticalParty

Formermember
ofCommunist
Party

64%
24%

5.37
5.58

17%
25%

7%
6%

3%
12%

55%
20%

5.29
5.26

15%
20%

3%
2%

1%
9%

Workforincome
Voters

NonVoters

Note:Eachcelldisplaytheaveragevalueofeachvariableoneachcolumn,foreachagegroup.

21

Table5.BivariateProbitvs.Probit:EstimatedCoefficients

AgeofRespondent(1)
age25
age35
age45
age55

BivariateProbit
Education Pensions

ProbitModels
Education Pensions

0.1529***
(0.0413)
0.1359***
(0.0441)
0.2161***
(0.0461)
0.3160***
(0.0448)

0.0202
(0.0492)
0.0907*
(0.0523)
0.3013***
(0.0530)
0.6105***
(0.0504)

0.1556***
(0.0416)
0.1359***
(0.0443)
0.2133***
(0.0465)
0.3010***
(0.0450)

0.0236
(0.0504)
0.1158**
(0.0539)
0.3206***
(0.0544)
0.6339***
(0.0516)

0.0402
(0.0366)
0.0951***
(0.0160)
0.0792***
(0.0259)
0.2707***
(0.0407)
0.5622***
(0.0447)
0.1394***
(0.0284)
0.0130
(0.0110)
0.0018
(0.0327)
0.1316**
(0.0648)
0.0995
(0.0620)

0.0063
(0.0326)
0.0921***
(0.0144)
0.0297
(0.0239)
0.3558***
(0.0414)
0.7297***
(0.0445)
0.0803***
(0.0265)
0.0187*
(0.0108)
0.0005
(0.0306)
0.0584
(0.0581)
0.0908
(0.0615)

0.0468
(0.0376)
0.0994***
(0.0165)
0.0887***
(0.0262)
0.2620***
(0.0405)
0.5491***
(0.0445)
0.1398***
(0.0287)
0.0134
(0.0108)
0.0040
(0.0328)
0.1246*
(0.0663)
0.1027*
(0.0618)

37,197

37,159

NeverMarried

0.0060
(0.0324)
Childreninthehousehold
0.0908***
(0.0143)
Selectedrespondentisfemale
0.0281
(0.0239)
Secondaryeducation
0.3610***
(0.0415)
Tertiaryeducation
0.7293***
(0.0445)
Workforincome
0.0814***
(0.0263)
Logofpercapitaconsumption,PPP 0.0171
(0.0106)
MemberofReligiousOrganization 0.0035
(0.0305)
AffiliatedtoPoliticalParty
0.0530
(0.0583)
FormermemberofCommunistParty 0.0955
(0.0616)
Observations
37,041
Rho
0.652
(1)Omittedcategoryis18to24
Controlsincludecountrydummyvariables

22

Table6.Whatdoyouthinkarethetwomostimportantissuesfacingthecountryatthemoment?
MarginalEffectsfromProbitModels

age2529
age3034
age3539
age4044
age4549
age5054
age5559
age6064
age6569
age7074

EducationalSystem
(1)
0.0109***
(0.0026)
0.0122***
(0.0022)
0.0121***
(0.0024)
0.0065**
(0.0032)
0.0136***
(0.0025)
0.0171***
(0.0026)
0.0213***
(0.0025)
0.0168***
(0.0034)
0.0139***
(0.0034)
0.0146***
(0.0040)

HealthcareSystem
(2)
0.0233***
(0.0056)
0.0384***
(0.0051)
0.0428***
(0.0058)
0.0485***
(0.0057)
0.0457***
(0.0043)
0.0527***
(0.0048)
0.0519***
(0.0072)
0.0656***
(0.0069)
0.0578***
(0.0087)
0.0676***
(0.0086)

Pensions ProtectingtheEnvironment FightingCrime EconomicSituation

(3)
(4)
(5)
(6)
0.0100*
0.0018
0.0004
0.0145*
(0.0058)
(0.0020)
(0.0052)
(0.0075)
0.0097
0.0011
0.0003
0.0299***
(0.0059)
(0.0020)
(0.0059)
(0.0083)
0.0131**
0.0007
0.0029
0.0446***
(0.0054)
(0.0026)
(0.0062)
(0.0106)
0.0156***
0.0023
0.0049
0.0365***
(0.0059)
(0.0021)
(0.0071)
(0.0101)
0.0235***
0.0040*
0.0145**
0.0368***
(0.0062)
(0.0022)
(0.0063)
(0.0105)
0.0397***
0.0017
0.0214**
0.0253**
(0.0068)
(0.0018)
(0.0084)
(0.0100)
0.0596***
0.0037
0.0299***
0.0169*
(0.0090)
(0.0028)
(0.0083)
(0.0094)
0.0697***
0.0024
0.0425***
0.0122
(0.0118)
(0.0023)
(0.0101)
(0.0112)
0.0822***
0.0049*
0.0496***
0.0043
(0.0148)
(0.0027)
(0.0105)
(0.0107)
0.0569***
0.0258**
0.0923***
0.0013
(0.0152)
(0.0019)
(0.0118)
(0.0110)

Observations
173,756
173,756
173,756
173,756
173,756
Rsquared
0.0955
0.0804
0.0676
0.106
0.0670
Standarderrorsinparentheses
***p<0.01,**p<0.05,*p<0.1
Controlsincludemaritalstatus,numberofchildren,employmentstatus,retired,gender,citysize,education,yearandcountryfixedeffects

23

173,756
0.0434

RaisingPrices/Inflation
(7)
0.0030
(0.0051)
0.0059
(0.0059)
0.0140**
(0.0060)
0.0161***
(0.0063)
0.0225***
(0.0073)
0.0316***
(0.0058)
0.0336***
(0.0070)
0.0397***
(0.0065)
0.0413***
(0.0076)
0.0337***
(0.0082)
173,756
0.0782

Taxation FightingTerrorism Housing

(8)
(9)
(10)
0.0005
0.0008
0.0006
(0.0028)
(0.0015)
(0.0025)
0.0029
0.0016
0.0050**
(0.0030)
(0.0014)
(0.0024)
0.0109***
0.0004
0.0102***
(0.0032)
(0.0024)
(0.0016)
0.0097***
0.0019
0.0122***
(0.0033)
(0.0022)
(0.0022)
0.0105**
0.0021
0.0131***
(0.0042)
(0.0018)
(0.0020)
0.0132***
0.0009
0.0133***
(0.0039)
(0.0023)
(0.0016)
0.0199***
0.0022
0.0154***
(0.0035)
(0.0026)
(0.0020)
0.0227***
0.0006
0.0166***
(0.0042)
(0.0029)
(0.0019)
0.0162***
0.0031
0.0194***
(0.0046)
(0.0033)
(0.0019)
0.0222***
0.0045
0.0190***
(0.0034)
(0.0045)
(0.0022)
173,756
0.0515

173,756
0.256

154,407
0.0938

Immigration Unemployment
(11)
(12)
0.0042
0.0185*
(0.0027)
(0.0102)
0.0068**
0.0407***
(0.0034)
(0.0099)
0.0056
0.0421***
(0.0039)
(0.0117)
0.0073**
0.0469***
(0.0035)
(0.0099)
0.0106***
0.0370***
(0.0034)
(0.0086)
0.0111***
0.0331***
(0.0040)
(0.0091)
0.0109***
0.0427***
(0.0040)
(0.0099)
0.0102**
0.0642***
(0.0040)
(0.0116)
0.0083*
0.0715***
(0.0048)
(0.0141)
0.0110**
0.0884***
(0.0051)
(0.0127)
173,756
0.129

173,756
0.0671

Table7.Whatdoyouthinkarethetwomostimportantissuesfacingthecountryatthemoment?
MarginalEffectsfromProbitModels,controllingforcohorteffects.

age2529
age3034
age3539
age4044
age4549
age5054
age5559
age6064
age6569
age7074
born19301934
born19351939
born19401944
born19451949
born19501954
born19551959
born19601964
born19651969
born19701974
born19751979
born19801984

EducationalSystem
(1)
0.0098***
(0.0037)
0.0132**
(0.0054)
0.0177***
(0.0065)
0.0153*
(0.0085)
0.0230***
(0.0086)
0.0270***
(0.0083)
0.0316***
(0.0085)
0.0294***
(0.0093)
0.0245**
(0.0118)
0.0181
(0.0139)
0.0066
(0.0198)
0.0058
(0.0231)
0.0189
(0.0240)
0.0241
(0.0235)
0.0152
(0.0188)
0.0153
(0.0160)
0.0270***
(0.0133)
0.0098
(0.0117)
0.0070
(0.0081)
0.0035
(0.0062)
0.0019
(0.0039)

HealthcareSystem
(2)
0.0154**
(0.0073)
0.0170
(0.0104)
0.0077
(0.0129)
0.0037
(0.0154)
0.0029
(0.0157)
0.0035
(0.0196)
0.0048
(0.0240)
0.0217
(0.0266)
0.0224
(0.0301)
0.0373
(0.0327)
0.0253
(0.0333)
0.0298
(0.0339)
0.0345
(0.0309)
0.0478
(0.0301)
0.0486*
(0.0254)
0.0536**
(0.0225)
0.0035
(0.0187)
0.0464***
(0.0161)
0.0359**
(0.0142)
0.0183
(0.0113)
0.0067
(0.0066)

Pensions
(3)
0.0152**
(0.0073)
0.0183*
(0.0103)
0.0193*
(0.0115)
0.0201
(0.0138)
0.0244
(0.0159)
0.0333*
(0.0194)
0.0441*
(0.0235)
0.0426*
(0.0238)
0.0411
(0.0273)
0.0326
(0.0276)
0.0632
(0.0386)
0.0386
(0.0322)
0.0246
(0.0267)
0.0152
(0.0230)
0.0043
(0.0196)
0.0022
(0.0167)
0.0333*
(0.0127)
0.0054
(0.0115)
0.0106
(0.0094)
0.0126*
(0.0072)
0.0071
(0.0045)

ProtectingtheEnvironment FightingCrime
(4)
(5)
0.0039*
0.0195***
(0.0022)
(0.0060)
0.0030
0.0340***
(0.0032)
(0.0092)
0.0052
0.0511***
(0.0048)
(0.0130)
0.0033
0.0618***
(0.0052)
(0.0187)
0.0045
0.0750***
(0.0063)
(0.0226)
0.0091
0.0817***
(0.0061)
(0.0269)
0.0088
0.0909***
(0.0070)
(0.0316)
0.0096
0.1018***
(0.0072)
(0.0344)
0.0077
0.1042***
(0.0089)
(0.0390)
0.0112
0.1142**
(0.0078)
(0.0467)
0.0134
0.0571**
(0.0179)
(0.0285)
0.0180
0.0511**
(0.0172)
(0.0249)
0.0176
0.0523**
(0.0155)
(0.0236)
0.0181
0.0594***
(0.0138)
(0.0209)
0.0189
0.0585***
(0.0122)
(0.0206)
0.0162
0.0611***
(0.0106)
(0.0188)
0.0091
0.0817***
(0.0076)
(0.0154)
0.0061
0.0613***
(0.0058)
(0.0132)
0.0072
0.0511***
(0.0052)
(0.0096)
0.0056*
0.0409***
(0.0034)
(0.0074)
0.0032
0.0316***
(0.0026)
(0.0051)

EconomicSituation
(6)
0.0051
(0.0108)
0.0080
(0.0156)
0.0064
(0.0231)
0.0223
(0.0247)
0.0279
(0.0260)
0.0384
(0.0268)
0.0399
(0.0309)
0.0415
(0.0331)
0.0592*
(0.0350)
0.0786**
(0.0359)
0.0585
(0.0447)
0.0717*
(0.0407)
0.0673*
(0.0407)
0.0641*
(0.0366)
0.0684*
(0.0351)
0.0807***
(0.0302)
0.0384
(0.0294)
0.0697**
(0.0272)
0.0625***
(0.0228)
0.0471***
(0.0173)
0.0298***
(0.0101)

Observations
173,756
173,756
173,756
173,756
173,756
173,756
Rsquared
0.0961
0.0806
0.0681
0.106
0.0674
0.0435
Standarderrorsinparentheses
***p<0.01,**p<0.05,*p<0.1
Controlsincludemaritalstatus,numberofchildren,employmentstatus,retired,gender,citysize,education,yearandcountryfixedeffects

24

RaisingPrices/Inflation
(7)
0.0014
(0.0064)
0.0038
(0.0088)
0.0130
(0.0125)
0.0124
(0.0152)
0.0108
(0.0177)
0.0107
(0.0191)
0.0083
(0.0217)
0.0127
(0.0260)
0.0062
(0.0290)
0.0204
(0.0328)
0.0692**
(0.0301)
0.0460
(0.0306)
0.0329
(0.0282)
0.0238
(0.0258)
0.0286
(0.0221)
0.0193
(0.0197)
0.0107
(0.0173)
0.0002
(0.0149)
0.0005
(0.0112)
0.0025
(0.0093)
0.0010
(0.0070)

Taxation
(8)
0.0022
(0.0035)
0.0008
(0.0045)
0.0101*
(0.0057)
0.0101
(0.0071)
0.0107
(0.0091)
0.0121
(0.0103)
0.0170
(0.0118)
0.0174
(0.0141)
0.0045
(0.0179)
0.0054
(0.0179)
0.0183
(0.0164)
0.0222
(0.0151)
0.0090
(0.0169)
0.0077
(0.0151)
0.0021
(0.0134)
0.0024
(0.0113)
0.0121
(0.0094)
0.0010
(0.0074)
0.0009
(0.0066)
0.0039
(0.0048)
0.0019
(0.0032)

FightingTerrorism
(9)
0.0064**
(0.0027)
0.0079
(0.0055)
0.0129
(0.0088)
0.0118
(0.0091)
0.0139
(0.0090)
0.0174*
(0.0100)
0.0229*
(0.0123)
0.0183
(0.0123)
0.0179
(0.0126)
0.0172
(0.0136)
0.0100
(0.0083)
0.0110
(0.0077)
0.0125*
(0.0072)
0.0151**
(0.0059)
0.0149***
(0.0057)
0.0148***
(0.0057)
0.0174*
(0.0056)
0.0125**
(0.0057)
0.0110**
(0.0054)
0.0103***
(0.0036)
0.0050
(0.0034)

173,756
0.0783

173,756
0.0517

173,756
0.257

Housing Immigration Unemployment

(10)
(11)
(12)
0.0038
0.0019
0.0173
(0.0031)
(0.0039)
(0.0135)
0.0088***
0.0032
0.0287
(0.0034)
(0.0067)
(0.0175)
0.0116***
0.0022
0.0174
(0.0041)
(0.0089)
(0.0237)
0.0157
0.0112**
0.0063
(0.0051)
(0.0095)
(0.0249)
0.0095
0.0110
0.0081
(0.0069)
(0.0105)
(0.0259)
0.0061
0.0122
0.0157
(0.0078)
(0.0121)
(0.0295)
0.0034
0.0122
0.0318
(0.0100)
(0.0132)
(0.0346)
0.0011
0.0110
0.0469
(0.0110)
(0.0139)
(0.0369)
0.0043
0.0087
0.0464
(0.0133)
(0.0154)
(0.0405)
0.0123
0.0073
0.0608
(0.0170)
(0.0158)
(0.0427)
0.0242***
0.0138
0.0255
(0.0051)
(0.0141)
(0.0452)
0.0242***
0.0020
0.0228
(0.0057)
(0.0153)
(0.0436)
0.0191***
0.0021
0.0238
(0.0070)
(0.0160)
(0.0406)
0.0161**
0.0017
0.0109
(0.0079)
(0.0146)
(0.0371)
0.0098
0.0003
0.0003
(0.0082)
(0.0142)
(0.0326)
0.0056
0.0025
0.0161
(0.0085)
(0.0126)
(0.0289)
0.0061
0.0122
0.0282
(0.0082)
(0.0115)
(0.0255)
0.0010
0.0048
0.0279
(0.0072)
(0.0092)
(0.0241)
0.0196
0.0047
0.0069
(0.0067)
(0.0080)
(0.0223)
0.0099*
0.0056
0.0053
(0.0056)
(0.0065)
(0.0155)
0.0029
0.0059
0.0112
(0.0041)
(0.0040)
(0.0117)
154,407
0.0947

173,756
0.129

173,756
0.0672

Figure1.Whichshouldbethefirstorsecondpriorityforextragovernmentspending?
90%

90%

(a)WesternEurope

80%

80%

70%

70%

60%

%ofrespondents

%ofrespondents

60%

50%

40%

50%

40%

30%

30%

20%

20%

10%

10%

Age

0%

21 23 25 27 29 31 33 35 37 39 41 43 45 47 49 51 53 55 57 59 61 63 65 67 69 71 73 75 77 79

90%

(c)NewEUMemberStates

80%

80%

70%

70%

60%

60%

%ofrespondents

%ofrespondents

Age

0%

21 23 25 27 29 31 33 35 37 39 41 43 45 47 49 51 53 55 57 59 61 63 65 67 69 71 73 75 77 79

90%

(b)FormerSovietEconomiesandTurkey

50%

40%

(d)WesternBalkans

50%

40%

30%

30%

20%

20%

10%

10%

Age

21 23 25 27 29 31 33 35 37 39 41 43 45 47 49 51 53 55 57 59 61 63 65 67 69 71 73 75 77 79

21 23 25 27 29 31 33 35 37 39 41 43 45 47 49 51 53 55 57 59 61 63 65 67 69 71 73 75 77 79

Healthcare

Education

AssistingthePoor

25

Age

0%

0%

Pensions

Environment

Figure2.Didyouvoteinthelastelections?

th

5 degreepolynomialapproximationbasedonLITSII.

26

Figure3.Whichshouldbethefirstorsecondpriorityforextragovernmentspending?
EstimatedMarginalEffectsassociatedwithOlderthan54dummyvariable.
0.7

0.7

Education

0.5

0.5

0.3

0.3

0.1

0.1

0.1

0.1

0.3

0.3

0.5

0.5

0.7

0.7

Coefficient

0.7

95%CI

Coefficient

0.7

Pensions

0.5

0.5

0.3

0.3

0.1

0.1

0.1

0.1

0.3

0.3

0.5

0.5

0.7

0.7

Coefficient

95%CI

27

95%CI

AssistthePoor

Coefficient

Health

95%CI

Figure4.Whatdoyouthinkarethetwomostimportantissuesfacingthecountryatthemoment?

Source:Eurobarometersurveysbetween2004and2013.

28

Figure5.Whatdoyouthinkarethetwomostimportantissuesfacingthecountryatthemoment?
MarginalEffectsofAge

Eachdotrepresentsthemarginaleffects,whilethedashedlinesarethe95%confidenceintervals.Controlvariablesincludemaritalstatus,
numberofchildren,employmentstatus,retired,gender,citysize,education,yearandcountryfixedeffects.

29

Albania
Armenia
Azerbaijan
Belarus
BosniaandHerzegovina
Bulgaria
Croatia
CzechRepublic
Estonia
France
Georgia
Germany
UnitedKingdom
Hungary
Italy
Kazakhstan
Kyrgyzstan
Latvia
Lithuania
TFYRMacedonia
RepublicofMoldova
Mongolia
Poland
Romania
RussianFederation
Serbia
Slovakia
Slovenia
Sweden
Tajikistan
Turkey
Ukraine
Uzbekistan
Kosovo
Montenegro

1039
968
976
975
1007
994
911
984
955
985
952
1010
1478
1002
1038
973
990
941
951
1036
977
988
1573
1051
1523
1372
985
980
885
981
976
1508
1472
1059
968

Observations

16.8%
22.4%
8.2%
18.1%
30.4%
49.8%
44.6%
32.6%
48.8%
44.3%
38.6%
40.5%
57.0%
56.1%
37.5%
14.8%
7.8%
48.6%
49.5%
22.9%
35.8%
6.1%
39.4%
42.7%
34.8%
46.2%
13.4%
34.0%
57.9%
5.0%
11.6%
31.3%
7.5%
9.4%
19.2%

234
310
156
190
325
446
435
311
497
439
380
381
677
526
343
201
216
432
464
301
454
162
644
462
592
627
180
315
406
150
202
574
257
159
222

8.5%
12.1%
3.1%
7.7%
18.3%
33.3%
28.6%
14.9%
29.9%
26.3%
26.3%
26.9%
46.4%
38.4%
24.0%
5.2%
2.4%
37.8%
35.9%
13.0%
18.9%
2.9%
20.9%
28.2%
20.3%
25.6%
3.3%
19.9%
39.2%
2.5%
4.0%
13.5%
2.8%
3.7%
10.7%

109
156
73
68
167
267
239
135
323
225
225
203
427
316
173
87
93
292
288
159
242
83
328
279
281
313
56
162
193
60
71
324
106
66
109

LifeinTransitionSurveyII(2010)
AmongHouseholdHeads20yearsorolder
AmongHouseholdHeads20yearsorolder
%Olderthan55
%Olderthan65
%
N
%
N
12.1%
4.1%
9.7%
14.4%
4.0%
9.7%
5.3%
4.3%
10.8%
5.3%
5.4%
0.3%
19.7%
18.2%
2.8%
6.7%
8.2%
10.6%
15.9%
7.9%
5.4%
7.4%
5.3%
9.0%
3.0%
10.9%
18.3%
2.6%
17.4%
8.4%
10.4%
3.4%
8.3%
14.1%

28.9%
26.5%
17.9%
32.5%
34.4%
40.1%
39.3%
36.9%
38.0%
39.0%
33.2%
40.2%
37.3%
37.9%
40.3%
21.5%
16.0%
38.0%
33.6%
30.8%
30.4%
13.5%
34.1%
33.7%
31.8%
35.3%
31.7%
36.6%
40.5%
13.4%
22.0%
34.7%
15.8%
33.3%

30

17.0%

15.0%
14.9%
8.8%
17.7%
20.0%
22.5%
22.2%
19.2%
22.2%
22.2%
18.9%
25.6%
21.8%
21.1%
25.0%
10.0%
7.5%
23.0%
19.9%
15.5%
14.8%
6.1%
17.2%
18.7%
16.6%
18.0%
15.7%
20.6%
23.8%
6.3%
10.9%
19.7%
7.5%

6.3%

6.5%
2.8%
5.7%
10.0%
1.7%
10.8%
6.4%
4.3%
7.7%
4.1%
7.4%
1.3%
24.6%
17.3%
1.0%
4.8%
5.2%
14.8%
16.0%
2.5%
4.1%
3.2%
3.7%
9.5%
3.7%
7.6%
12.5%
0.7%
15.4%
3.8%
7.0%
6.2%
4.6%

PopulationEstimatesUnitedNations
Amongindivuals20yearsorolder
Olderthan55
Olderthan65
DifferencewithLITS
%
DifferencewithLITS

TableA1.DescriptiveStatistics,LITSandUnitedNationsPopulationStatistics

TableA2.MarginalEffectsontheProbabilityofSupportinganIncreaseinGovernmentExpenditures,
FirstPriorityforExtraGovernmentExpenditure.
Probitregression:MarginalEffects
Whichshouldbethefirstpriorityforextragovernmentspending?
Education
AgeofRespondent(1)
2534
3544
4554
Olderthan54

0.0364***
(0.0125)
0.0381***
(0.0128)
0.0731***
(0.0122)
0.1219***
(0.0117)

Children
Selectedrespondentisfemale
Secondaryeducation
Tertiaryeducation
Workforincome
Logofpercapitaconsumption,PPP
MemberofReligiousOrganization
AffiliatedtoPoliticalParty
FormermemberofCommunistParty

Observations
PseudoR2

Healthcare

0.0620***
(0.0127)
0.0657***
(0.0135)
0.0802***
(0.0132)
0.0974***
(0.0144)

0.0317*
(0.0164)
0.0665***
(0.0169)
0.0799***
(0.0174)
0.0804***
(0.0157)

0.0391**
(0.0174)
0.0768***
(0.0189)
0.0725***
(0.0193)
0.0723***
(0.0184)

0.0023
(0.0120)
0.0111
(0.0129)
0.0661***
(0.0152)
0.1791***
(0.0144)

AssistingthePoor

0.0171
(0.0136)
0.0367**
(0.0156)
0.0762***
(0.0172)
0.1453***
(0.0159)

0.0041
(0.0106)
0.0015
(0.0109)
0.0008
(0.0112)
0.0333***
(0.0101)

0.0009
(0.0114)
0.0039
(0.0124)
0.0060
(0.0128)
0.0465***
(0.0116)

0.0278***
(0.0046)
0.0182**
(0.0080)
0.0791***
(0.0141)
0.1914***
(0.0158)
0.0057
(0.0088)
0.0051
(0.0038)
0.0149
(0.0103)
0.0252
(0.0198)
0.0109
(0.0188)

0.0260***
(0.0054)
0.0464***
(0.0087)
0.0506***
(0.0145)
0.0256
(0.0157)
0.0066
(0.0099)
0.0025
(0.0039)
0.0287***
(0.0111)
0.0028
(0.0223)
0.0131
(0.0220)

0.0171***
(0.0040)
0.0041
(0.0058)
0.0420***
(0.0084)
0.0775***
(0.0086)
0.0299***
(0.0066)
0.0005
(0.0024)
0.0036
(0.0072)
0.0226*
(0.0134)
0.0188
(0.0143)

0.0066*
(0.0034)
0.0027
(0.0060)
0.0517***
(0.0093)
0.0933***
(0.0097)
0.0161**
(0.0067)
0.0084***
(0.0023)
0.0033
(0.0077)
0.0024
(0.0149)
0.0199
(0.0146)

37,041
0.0690

37,041
0.0247

37,431
0.0209

37,041
0.0389

Standarderrorsinparentheses
***p<0.01,**p<0.05,*p<0.1
Controlsincludecountrydummyvariables

31

Pensions