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Welfare state winners and losers in ageing societies

Author

Listed:
  • Miguel Sánchez-Romero
  • Gemma Abío
  • Montserrat Botey
  • Alexia Prskawetz
  • Joze Sambt
  • Meritxell Solé Juvés
  • Guadalupe Souto
  • Lili Vargha
  • Concepció Patxot

Abstract

In this paper, we analyse the impact of population ageing on the sustainability and the intergenerational fairness of public fiscal policy in three selected European countries (Austria, France, and Spain). We use NTA and NTTA data, and introduce these data into a large-scale general equilibrium OLG model with realistic assumptions regarding demographic trends and changes in population structure. The results for sustainability show a sharp increase in the share of public expenditure to GDP for the main programmes of the welfare state. In the three countries analysed, public policies (e.g. education, health care, and pension benefits) redistribute income from younger individuals to older individuals. Our findings indicate that these policies redistribute more resources to older individuals in Spain and fewer resources to older individuals in Austria. We consider the effects of several reform scenarios, including simulations in which the statutory retirement age is raised and the tax base for financing health care expenditures are changed. We also describe the consequences of the population having a fixed level of educational attainment.

Suggested Citation

  • Miguel Sánchez-Romero & Gemma Abío & Montserrat Botey & Alexia Prskawetz & Joze Sambt & Meritxell Solé Juvés & Guadalupe Souto & Lili Vargha & Concepció Patxot, 2019. "Welfare state winners and losers in ageing societies," Vienna Yearbook of Population Research, Vienna Institute of Demography (VID) of the Austrian Academy of Sciences in Vienna, vol. 17(1), pages 009-036.
    • Handle: RePEc:vid:yearbk:v:17:y:2019:i:1:p:009-036
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    References listed on IDEAS

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    1. Lee, R., 2016. "Macroeconomics, Aging, and Growth," Handbook of the Economics of Population Aging, in: Piggott, John & Woodland, Alan (ed.), Handbook of the Economics of Population Aging, edition 1, volume 1, chapter 0, pages 59-118, Elsevier.
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    5. Ronald Lee & Andrew Mason (ed.), 2011. "Population Aging and the Generational Economy," Books, Edward Elgar Publishing, number 13816.
    6. Concepció Patxot & Elisenda Rentería & Miguel Romero & Guadalupe Souto, 2012. "Measuring the balance of government intervention on forward and backward family transfers using NTA estimates: the modified Lee arrows," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 19(3), pages 442-461, June.
    7. Miguel Sánchez-Romero & Gemma Abio & Concepció Patxot & Guadalupe Souto, 2018. "Contribution of demography to economic growth," SERIEs: Journal of the Spanish Economic Association, Springer;Spanish Economic Association, vol. 9(1), pages 27-64, March.
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    9. Piggott, John & Woodland, Alan (ed.), 2016. "Handbook of the Economics of Population Aging," Handbook of the Economics of Population Aging, Elsevier, edition 1, volume 1, number 1.
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    Cited by:

    1. Spielauer, Martin & Horvath, Thomas & Fink, Marian & Abio, Gemma & Souto, Guadalupe & Patxot, Ció & Istenič, Tanja, 2022. "Measuring the lifecycle impact of welfare state policies in the face of ageing," Economic Analysis and Policy, Elsevier, vol. 75(C), pages 1-25.
    2. Martin Spielauer & Thomas Horvath & Marian Fink & Gemma Abio & Guadalupe Souto Nieves & Concepció Patxot & Tanja Istenič, 2020. "microWELT: Microsimulation Projection of Full Generational Accounts for Austria and Spain," WIFO Working Papers 618, WIFO.

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