This paper quantifies the economic well-being of different age groups and the extent of their reliance on incomes from public and private sources. The aim is to establish how social benefits, and the taxes needed to finance them, affect income levels and disparities across different age groups. Results are compared across nine OECD countries (Finland, France, Germany, Italy, Luxembourg, Norway, Sweden, United Kingdom and United States) using household microdata and microsimulation models to illustrate the influence of market income patterns, household structures and social protection measures on the income distribution among and between different age groups. We use information from the late 1990s to establish a distributional baseline that refers to an early phase of the projected increase in dependency ratios and also pre-dates some of the major reforms that are introduced to address these. Results even for this period show that social protection was already largely old-age protection, with those aged 65 and over typically receiving almost three times the (net) cash transfers of the average person. In most countries, the incidence of low incomes was nevertheless higher among old-age individuals than for the population as a whole. We argue, however, that the crosscountry evidence suggests some scope for re-balancing social protection spending without necessarily compromising distributional objectives.
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Paper provided by EUROMOD at the Institute for Social and Economic Research in its series EUROMOD Working Papers with number
EM3/06.
Length: Date of creation: 01 Sep 2006 Date of revision: Handle: RePEc:ese:emodwp:em3/06
Note: microsimulation, inequality, poverty, social protection, ageing, demographics Contact details of provider: Postal: RAB Butler Building, University of Essex, Wivenhoe Park, Colchester, ESSEX C04 3SQ Phone: +44 (0)1206 872957 Fax: +44 (0)1206 873151 Email: Web page: http://www.iser.essex.ac.uk/research/euromod/ More information through EDIRC
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Find related papers by JEL classification: C81 - Mathematical and Quantitative Methods - - Data Collection and Data Estimation Methodology; Computer Programs - - - Microeconomic Data D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution H22 - Public Economics - - Taxation, Subsidies, and Revenue - - - Incidence H55 - Public Economics - - National Government Expenditures and Related Policies - - - Social Security and Public Pensions
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