Does an Aging Population Increase Inequality?Robert K. von Weizsäcker No 535, Discussion Papers from Institut fuer Volkswirtschaftslehre und Statistik, Abteilung fuer Volkswirtschaftslehre Abstract: The paper reviews recent research on the impact of an aging population on the distribution of income. After briefly discussing the demographic conditions responsible for population aging, a short account is given of demographic trends in the industrialized world. In order to disentangle the many potential channels by which an aging society affects the dispersion of income, several levels of aggregation are distinguished. The paper differentiates between intra- and intergenerational issues, between direct and indirect demographic inequality effects, and between the distribution of current and lifetime income. It emphasizes the critical role of age-related redistributive tax-transfer systems, like public pension schemes and health care systems. Sources of distributional policy conflicts are identified at both the cross-section level and the lifetime level of income inequality. The institutional design of intergenerational burden sharing, individual disincentive reactions, shifts in age-income profiles related to cohort size, and politicoeconomic repercussions are shown to drive the relation between population aging and income distribution in distinct and partially opposite ways. JEL-codes: D31 H55 J18 (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:mnh:vpaper:1058 Access Statistics for this paper More papers in Discussion Papers from Institut fuer Volkswirtschaftslehre und Statistik, Abteilung fuer Volkswirtschaftslehre Contact information at EDIRC. |
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