Elderly Migration and Education Spending: Intergenerational Conflict Revisited

The net effect of elderly migration on education spending is not clear. Poterba was one of the first to test the intergenerational conflict hypothesis using longitudinal panel data of state K-12 education spending. Poterba documents a negative effect from population aging on government spending on K-12 education. This study aims to provide new evidence on the intergenerational conflict by addressing the problem of reverse causality, controlling for spatial dependence, utilizing migration rates rather than percentage of elderly population, and controlling for age heterogeneity in preferences. Like Conway and Rork, the authors take advantage of the available longitudinal panel data in addressing the reverse causality problem that complicates the estimation of the relationship between state fiscal policy and elderly migration. In addition, they test for the presence of intergenerational conflict using county-level data. They present newer and more detailed evidence that supports Poterba's original conclusions despite some recent findings to the contrary as discussed below. However, their results suggest that preferences for education spending of elderly migrants vary with their age. Adapted from the source document.