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The public reallocation of resources across age: A comparison of Austria and Sweden

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  • Hammer, Bernhard
  • Prskawetz, Alexia
Abstract
There is a strong interdependency between public transfers and the shape of the economic life-cycle. Austria and Sweden are very similar economies in terms of production, income and the size of the public sector. There are however remarkable differences in the design of public transfers, their distribution over age-groups and consequently in the shape of the average economic life-cycle: One of the most remarkable differences is the earlier labour force exit age in Austria. The period of active labour force participation is consequently more compressed in Austria, leading to higher contributions to the public transfer system for the age-groups 20-45 and to a higher share of public transfers directed to the elderly. Using economic dependency ratios we show that the sustainability of the public transfer system depends less on its size than on its design: The Swedish system collects the contributions from a wider range of age-groups, transfers a smaller share to the elderly and provides more support to younger generations, supporting them to invest in own children. These characteristics have a positive effect on the sustainability of the Swedish system: Although in Sweden there is a larger share of the population in the age-group 60+, the total economic dependency of the elderly is lower.

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  • Hammer, Bernhard & Prskawetz, Alexia, 2012. "The public reallocation of resources across age: A comparison of Austria and Sweden," ECON WPS - Working Papers in Economic Theory and Policy 05/2012, TU Wien, Institute of Statistics and Mathematical Methods in Economics, Economics Research Unit.
    • Handle: RePEc:zbw:tuweco:052012
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    3. Forsell, Charlotte & Hallberg, Daniel & Lindh, Thomas & Öberg, Gustav, 2008. "Intergenerational public and private sector redistribution in Sweden 2003," Arbetsrapport 2008:4, Institute for Futures Studies.
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    1. Loichinger, Elke & Hammer, Bernhard & Prskawetz, Alexia & Freiberger, Michael & Sambt, Joze, 2014. "Economic dependency ratios: Present situation and future scenarios," ECON WPS - Working Papers in Economic Theory and Policy 02/2014, TU Wien, Institute of Statistics and Mathematical Methods in Economics, Economics Research Unit.
    2. Elke Loichinger & Bernhard Hammer & Alexia Prskawetz & Michael Freiberger & Joze Sambt, 2014. "Economic Dependency Ratios: Present Situation and Future Scenarios. WWWforEurope Working Paper No. 74," WIFO Studies, WIFO, number 50891.
    3. Bernhard Hammer & Alexia Prskawetz & Inga Freund, 2013. "Reallocation of Resources Across Age in a Comparative European Setting. WWWforEurope Working Paper No. 13," WIFO Studies, WIFO, number 46865.
    4. Hammer, Bernhard & Prskawetz, Alexia & Freund, Inga, 2015. "Production activities and economic dependency by age and gender in Europe: A cross-country comparison," The Journal of the Economics of Ageing, Elsevier, vol. 5(C), pages 86-97.
    5. Morne Oosthuizen, 2018. "Counting Women's Work in South Africa: Estimates of Household Production across the Lifecycle in 2000," Working Papers cwwwp6, University of Cape Town, Development Policy Research Unit.
    6. Hippolyte d'Albis & Carole Bonnet & Julien Navaux & Jacques Pelletan & François-­charles Wolff, 2017. "Le déficit de cycle de vie en France : une évaluation pour la période 1979-2001," PSE-Ecole d'économie de Paris (Postprint) halshs-01599680, HAL.
    7. Kashnitsky, Ilya & de Beer, Joop & van Wissen, Leo, 2017. "Decomposition of regional convergence in population aging across Europe," OSF Preprints ykqbv, Center for Open Science.
    8. Kashnitsky, Ilya, 2020. "Changing regional inequalities in ageing across Europe," OSF Preprints 6m4kg, Center for Open Science.
    9. Gál, Róbert I. & Szabó, Endre & Vargha, Lili, 2015. "The age-profile of invisible transfers: The true size of asymmetry in inter-age reallocations," The Journal of the Economics of Ageing, Elsevier, vol. 5(C), pages 98-104.
    10. Gál, Róbert Iván & Szabó, Endre & Vargha, Lili, 2015. "A láthatatlan transzferek korprofilja. Az aszimmetria valódi mértéke a korosztályok közötti erőforrás-átcsoportosítás rendszerében [The age profile of invisible transfers: the true degree of asymme," Közgazdasági Szemle (Economic Review - monthly of the Hungarian Academy of Sciences), Közgazdasági Szemle Alapítvány (Economic Review Foundation), vol. 0(6), pages 621-637.
    11. Morne Oosthuizen & Kezia Lilenstein, 2018. "Counting Women’s Work in Mauritius: Household Production across the Lifecycle in 2003," Working Papers cwwwp7, University of Cape Town, Development Policy Research Unit.
    12. d’Albis, Hippolyte & Bonnet, Carole & Navaux, Julien & Pelletan, Jacques & Wolff, François-Charles, 2015. "Le déficit de cycle de vie en France: une évaluation pour la période 1979-2011," CEPREMAP Working Papers (Docweb) 1513, CEPREMAP.

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