|No. 3/2009: GREY POWER AND
PUBLIC BUDGETS: FAMILY ALTRUISM HELPS CHILDREN, BUT NOT ELDERLY. Jørn
Rattsø and Rune Sørensen
The literature on generational conflict has been occupied with the negative effect for educational spending of increased share of elderly. We extend this literature to take into account altruism within the family where individuals care about the welfare of family members. The conflicting claims to the public budget must take into account the political strength of age groups, but also whether middle-aged have children or elderly parents in the community. We investigate the existence of family altruism using both survey data and demographic and local government budget data in Norway for 1992-2004. Family altruism has an impact on local government spending on primary education, but does not affect spending on old-age care. The old must take care of their own interests themselves.