Grey power and public budgets: Family altruism helps children, but not the elderly

The literature on intergenerational conflict and public budgets has shown that the demands of the elderly may crowd out educational spending. 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 will reflect the political strength of age groups, but may also be influenced by whether middle-aged have children or elderly parents in the community. We investigate the role of family altruism using both survey data and demographic and local government budget data in Norway from 1992 to 2004. Family altruism matters for local government spending on primary education, but does not affect spending on old-age care and health services. The old must take care of their own interests themselves.