ON AGE DISTRIBUTION OF POPULATION, GOVERNMENT EXPENDITURE AND FISCAL FEDERALISM

In this paper I build a simple model to analyze the consequences that population growth imposes on the relative needs of expenditure of gove rnments in a fiscal federalism setup. I assume, first, that some gover nment expenditure items can be classified according to the age of thei r recipient individuals and, second, that different levels of governme nt are usually assigned different expenditure programs. The implicatio n is that, for an initially given level of effective public good provi sion, changes in the size of population as well as in its age structur e will influence the composition of public expenditure for different l ayers of administration in a different manner.