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Aging, education and intergenerational flows in Uruguay

Author

Listed:
  • Maira Colacce

    (Larefi - Laboratoire d'analyse et de recherche en économie et finance internationales - UB - Université de Bordeaux)

  • Verónica Amarante
  • Marisa Bucheli
  • Mathias Nathan

Abstract

his article addresses the challenges posed by aging and inequality in a developing country, specifically Uruguay, by considering present and future intergenerational net public flows by age and socioeconomic group. We discuss the potential impact of the aging process on public redistribution by age and socioeconomic group, based on population projections by educational level elaborated from the Wittgenstein Centre for Demography and Global Human Capital (WIC). To address the potential effects of changes in age and educational structures by 2050, we estimate education-specific per capita age-profiles for public inflows and outflows in the baseline year and apply them to 2050 projections. Our results show substantial disparities in the present age profile of net flows from the public sector to population by educational group: the higher the level of education, the earlier net transfers change from positive to negative for individuals. Only the less educated group benefits directly from public redistribution, while the other three educational groups are net payers. Under plausible scenarios of educational expansion, net public flows result in a higher surplus in public accounts. A linear decomposition of the dynamic effects shows that this result is mainly driven by educational improvement, as the associated increase in outflows leads to a surplus in public accounts. In this way, the negative effect of changes in the age structure on net flows is counteracted. Redistributive tensions between educational groups also tend to dilute in the medium term because of educational expansion.

Suggested Citation

  • Maira Colacce & Verónica Amarante & Marisa Bucheli & Mathias Nathan, 2021. "Aging, education and intergenerational flows in Uruguay," Post-Print hal-03894389, HAL.
    • Handle: RePEc:hal:journl:hal-03894389
    DOI: 10.1016/j.jeoa.2020.100306
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    References listed on IDEAS

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    Cited by:

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    3. Bucheli, Marisa & González, Cecilia, 2024. "Investment in human capital by socioeconomic status in Uruguay," The Journal of the Economics of Ageing, Elsevier, vol. 27(C).

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    More about this item

    Keywords

    Intergenerational net transfers; Inequality; Education; Demographic change;
    All these keywords.

    JEL classification:

    • J10 - Labor and Demographic Economics - - Demographic Economics - - - General
    • H62 - Public Economics - - National Budget, Deficit, and Debt - - - Deficit; Surplus

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