This paper studies empirically the relation proposed by Brennan (2012) between an ageing society and the preference for financing public expenditures with debt issuance vis-à-vis income taxation. We collect data on the ageing of the median voter for a cross-country sample of advanced economies and OECD members where ageing of society is relatively sever and the political process is more democratic and economic institutions are subject to electorate scrutiny. The sample period covers a relatively long period of 30 years, from 1980 to 2010. Then we estimate the correlation between the median electorate age with public debt after controlling for country fixed effects and other determinants of public debt drawn from economic and political theory.
Within country estimates confirm the insight of Brennan (2012) and the preferred specification indicate that a one year ageing of the electorate may lead to an increase of public debt GDP ratio by 3.52 percent. Over a ten years horizon the average voter age increases by 1.39 years in our sample, suggesting an average increase in the stock of public debt of 4.89 percentage points in ten years.