Razin, Sadka, and Swagel [Razin, Asaf, Efraim Sadka, and Phillip Swagel (2002) “The Aging Population and the Size of the Welfare State” The Journal of Political Economy, vol. 110, no. 4, pp. 900–918.] unveil a puzzling fact: the welfare state appears to be shrinking even as the dependency ratio rises. While they formulate an elegant political economy model to explain the coexistence of an aging...