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Public Debt and Generational Balance in Austria Lueth, Erik; Raffelhueschen, Bernd

Author

Listed:
  • Keuschnigg, Christian

    (Institute of Public Finance, University of Saarland, Saarbruecken)

  • Keuschnigg, Mirela

    (Saarbrücken)

  • Koman, Reinhard

    (Institute for Advanced Studies, Vienna)

Abstract

Based on Austria's fiscal stance in 1995, we compute the generational accounts for currently living as well as future generations. The results reveal the existence of an enormous intergenerational imbalance in favor of currently living generations. Total public sector liabilities may be more than five times as high as the officially recorded level of public debt. Without any action, future generations would face life-time net taxes that are about 65 percent higher than the tax burden of a current newborn. If the government could fully and permanently retain the expenditure cutting and revenue raising effects of the 1996 fiscal consolidation package and the 1997 pension reform, then it might be able to significantly reduce the intergenerational liabilities. However, enacting both the recent tax reform 2000 and the reform of the family support scheme would increase again the fiscal imbalance and intergenerational inequity of fiscal policy in Austria.

Suggested Citation

  • Keuschnigg, Christian & Keuschnigg, Mirela & Koman, Reinhard, 2000. "Public Debt and Generational Balance in Austria Lueth, Erik; Raffelhueschen, Bernd," Economics Series 80, Institute for Advanced Studies.
    • Handle: RePEc:ihs:ihsesp:80
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    File URL: https://irihs.ihs.ac.at/id/eprint/1255
    File Function: First version, 2000
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    References listed on IDEAS

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    5. Gerhard Lehner, 1998. "Bund setzt Konsolidierung fort," WIFO Monatsberichte (monthly reports), WIFO, vol. 71(5), pages 349-363, May.
    6. Manfred Koch & Christian Thimann, 1999. "From Generosity to Sustainability: The Austrian Pension System and Options for its Reform," Empirica, Springer;Austrian Institute for Economic Research;Austrian Economic Association, vol. 26(1), pages 21-38, March.
    7. Alan J. Auerbach & Jagadeesh Gokhale & Laurence J. Kotlikoff, 1994. "Generational Accounting: A Meaningful Way to Evaluate Fiscal Policy," Journal of Economic Perspectives, American Economic Association, vol. 8(1), pages 73-94, Winter.
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    Cited by:

    1. Michael Ben-Gad, 2013. "Public Deficit Bias and Immigration," 2013 Meeting Papers 21, Society for Economic Dynamics.
    2. Berger, Johannes & Graf, Nikolaus & Strohner, Ludwig & Schuh, Ulrich, 2013. "Ein Schulden-Check für Österreich," Policy Notes 5, EcoAustria – Institute for Economic Research.
    3. Joze Sambt & Alexia Prskawetz, 2011. "National Transfer Accounts for Austria: low levels of education and the generosity of the social security system," Chapters, in: Ronald Lee & Andrew Mason (ed.), Population Aging and the Generational Economy, chapter 11, Edward Elgar Publishing.
    4. Berger, Johannes & Graf, Nikolaus & Strohner, Ludwig & Thomas, Tobias, 2018. "Nachhaltig oder nicht? Österreichs Staatsfinanzen im Schulden-Check," Policy Notes 26, EcoAustria – Institute for Economic Research.
    5. Berger, Johannes & Strohner, Ludwig & Thomas, Tobias, 2018. "Reformszenarien für eine nachhaltige Finanzierung des österreichischen Pensionssystems," Policy Notes 23, EcoAustria – Institute for Economic Research.
    6. Berger, Johannes & Graf, Nikolaus & Strohner, Ludwig & Thomas, Tobias, 2018. "Pflegefinanzierung in Österreich: Nachhaltigkeit und Reformoptionen," Policy Notes 25, EcoAustria – Institute for Economic Research.
    7. Berger, Johannes & Strohner, Ludwig & Thomas, Tobias, 2019. "Keine Zeit für mangelnde Budgetdisziplin: Analyse der Effekte von Ausgabensteigerungen, Arbeitsmarkt und Zins auf die Nachhaltigkeit der öffentlichen Finanzen," Policy Notes 37, EcoAustria – Institute for Economic Research.

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    More about this item

    Keywords

    Fiscal policy; Social security; Public debt; Generational accounting;
    All these keywords.

    JEL classification:

    • E6 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook
    • H5 - Public Economics - - National Government Expenditures and Related Policies
    • H6 - Public Economics - - National Budget, Deficit, and Debt

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