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The unequal impact of the crisis by age: An analysis based on National Transfer Accounts
Giorgos Papadomichelakis (UB)Ció Patxot (UB)Elisenda Rentería (CED-UAB)Meritxell Solé (UB)Guadalupe Souto (UAB)
• The risk of poverty for children is, in general, higher than for other age groups
• The welfare state protects basically the elderly, but not (to the same extent) the children
• The situation has worsen with the crisis in a significant number of countries
Some facts:
Population at risk-of-poverty in the EU before and after social transfers
Source: Eurostat, 2016
35.6% 36.7%32.0% 34.0%
87.2% 88.0%
20.3% 21.2%14.7% 17.1% 18.9%
14.0%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2008 2015 2008 2015 2008 2015
0-17 18-64 65 and more
before social transfers after social transfers
Source: Authors’ elaboration from NTA data (www.ntaccounts.org)
Net public transfers to the children and to the elderly in NTA countries(% of their own consumption)
Change in child (0-18) poverty rate and social exclusion
0 10 20 30 40 50
Poland
Slovakia
Switzerland
Norway
Finland
Romania
Blegium
Sweden
Austria
Czech Rep
Germany
Bulgaria
Malta
Netherlands
Portugal
Denmark
U. K.
Slovenia
Cyprus
Hungary
France
Estonia
Italy
Louxembourg
Spain
Lithuania
Ireland
Croatia
Latvia
Greece
Iceland
Canada
USA
Japan 2008 2012
In 20 out of 31 European countries child proverty has increased with the crisis
People at risk of poverty in Europe (households with children)
0
5
10
15
20
25
30
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
SPAIN
FINLAND
SWEDEN
UK
FRANCE
GERMANY
ITALY
European Union (27 countries)
Source: Eurostat, 2016
People at risk of poverty or social exclusion by age in Spain
Source: Eurostat, 2016
0
5
10
15
20
25
30
35
2006 2007 2008 2009 2010 2011 2012 2013
(% o
f tot
al p
opul
atio
n)
Less than 18 years From 18 to 64 years 65 years or over total
People at risk of poverty by type of household in Spain
5.310.6
0
5
10
15
20
25
30
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
% of
tota
l pop
ulatio
n
Households without dependent children
Households with dependent children
5,3 10,6
Source: Eurostat, 2016
• Using NTA to explore the unequal impact of the crisis by age inSpain.
• Estimating NTA for 2012 and comparing results to previousavailable years (2000, 2006 and 2008).
Our contribution:
0
5000
10000
15000
20000
25000
30000
35000
40000
45000
0 2 4 6 8 1012141618202224262830323436384042444648505254565860626466687072747678808284868890
2000 2006 2008 2012
Per capita labor income profile(in constant euros of 2012 per year)
Lower labor income for the young
Higher labor income for
older workers
Per capita consumption profile(in constant euros of 2012 per year)
Youngers’ consumption has come back to 2000’s level.
The effects on the elderly are smoother
Per capita Lifecycle Deficit profile(in constant euros of 2012 per year)
LCD extends from age 26 to 30!
The surplus size clearly shrinks
Financing aggregated Lifecycle Deficit of children (0-19)
-50
0
50
100
150
200
2000 2006 2008 2012
billi
ons
of €
TF TG ABR
Public transfers to the children have significantly decreased with the crisis.
Private transfers could not compensate that decrease.
61,2% 62% 53% 58%
40,3% 42%48% 41%
-20%
0%
20%
40%
60%
80%
100%
120%
2000 2006 2008 2012
Financing aggregated Lifecycle Deficit of the elderly (65+)
Public transfers significantly increased between 2000 and 2006, and practically remain the same with the crisis (2008-2012)
Private transfers are very small. Interestingly, they turn back to negative values in 2012.
-50
0
50
100
150
200
2000 2006 2008 2012
billi
ons o
f €
TF TG ABR
-13%3% 2%
-4%
63%77%
70% 76%
50% 20% 28% 28%
-20%
0%
20%
40%
60%
80%
100%
120%
2000 2006 2008 2012
Per capita profile of net public transfers (TG) in Spain
-10000
-5000
0
5000
10000
15000
0 3 6 9 12 15 18 21 24 27 30 33 36 39 42 45 48 51 54 57 60 63 66 69 72 75 78 81 84 87 90
euro
s/ye
ar
2000 2006 2008 2012
Returning to the pre-crisis level
Increasing TG for ages
65-82
Young workers paying less taxes
Older workers paying more taxes
Per capita profiles of public transfers inflows (transfers received)
0
5000
10000
15000
20000
0 3 6 9 12 15 18 21 24 27 30 33 36 39 42 45 48 51 54 57 60 63 66 69 72 75 78 81 84 87 90
euro
s/yea
r
2000 2006 2008 2012
Sharp decrease in 2012 for children
Significant increase for ages 65-82
Increase for working-age (unemployment)
Decrease for old workers
Per capita profiles of public transfers inflows: education (E), health (H) and contributory pensions (P)
0
2000
4000
6000
8000
10000
12000
14000
0 3 6 9 12 15 18 21 24 27 30 33 36 39 42 45 48 51 54 57 60 63 66 69 72 75 78 81 84 87 90
E-2008 E-2012
H-2008 H-2012
P-2008 P-2012
Sharp decrease in education
Significant increase for pensioners aged 65-80
Per capita profiles of public transfers outflows (taxes and contributions)
02000400060008000
100001200014000160001800020000
0 5 10 15 20 25 30 35 40 45 50 55 60 65 70 75 80 85 90
Public Transfers, Outflows 2000 Public Transfers, Outflows 2006
Public Transfers, Outflows 2008 Public Transfers, Outflows 2012
Taxes paid (per capita) have not decreased with the crisis. Only the age group 25-35 pays slightly less in 2012
Per capita profiles of net private transfers
-15000
-10000
-5000
0
5000
10000
15000
20000
0 5 10 15 20 25 30 35 40 45 50 55 60 65 70 75 80 85 90
2000 2006 2008 2012
The most important flow isfrom parents to children
Important reduction with thecrisis
Net public transfers to the children and the elderly in Spain (in % of their own consumption)
2000
2006
2008
2012
30%
35%
40%
45%
50%
55%
60%
65%
70%
30% 40% 50% 60% 70%
TG/C
youn
g
TG/C elderly
Main findings
• Children received much less public and private transfers during the crisis, so their consumption has significantly decreased
• Labor income has decreased specially for younger workers
• However, children pay similar taxes (or even higher) than before the crisis
• On the contrary, public transfers to the elderly have increased
Why high-income societies are highly averse to old-age poverty while they seem to accept child poverty quite naturally?
Welfare state systems have proven to be a very effective tool in improving intergenerational redistribution and reducing inequalities…
Thank you
The unequal impact of the crisis by age: An analysis based on National Transfer Accounts