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Can we keep the pre-crisis living standards? An analysis based on NTA profiles in Spain

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  • Patxot, Concepció
  • Rentería, Elisenda
  • Souto, Guadalupe

Abstract

In the context of the deep economic crisis affecting most western countries, but specially Southern Europe, some voices have claimed that Spaniards had been living beyond their means. In this paper, we try to shed some light on this issue by using National Transfer Accounts (NTA). We estimate the NTA for 2008 and compare them with the obtained previously for 2000 (Patxot et al., 2011a), obtaining interesting conclusions. The aggregated lifecycle deficit – difference between consumption and labour income – has increased from 8.8% of GDP in 2000 to 10.1% in 2008. The aggregated LCD evolution is driven on the one hand by the change in per capita profiles and, on the other hand by the change in population age structure. Along the observed period, the effect of population has been quite positive, due to the effect of migration, so that the economic support ratio has increased. In absence of population changes, LCD would have increased 2 percentage more points in terms of GDP. Nevertheless, the positive effect of population age structure is ending and the opposite effect is expected for the next decades with the baby boom retirement. Hence, our conclusion is that the levels of labour income and consumption by age observed in 2008 are not sustainable in the coming decades.

Suggested Citation

  • Patxot, Concepció & Rentería, Elisenda & Souto, Guadalupe, 2015. "Can we keep the pre-crisis living standards? An analysis based on NTA profiles in Spain," The Journal of the Economics of Ageing, Elsevier, vol. 5(C), pages 54-62.
    • Handle: RePEc:eee:joecag:v:5:y:2015:i:c:p:54-62
    DOI: 10.1016/j.jeoa.2014.09.002
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    References listed on IDEAS

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    1. Concepció Patxot & Elisenda Renteria & Miguel Sanchez-Romero & Guadalupe Souto, 2011. "How intergenerational transfers finance the lifecycle deficit in Spain," Chapters, in: Ronald Lee & Andrew Mason (ed.), Population Aging and the Generational Economy, chapter 10, Edward Elgar Publishing.
    2. Jimeno, Juan F. & Rojas, Juan A. & Puente, Sergio, 2008. "Modelling the impact of aging on social security expenditures," Economic Modelling, Elsevier, vol. 25(2), pages 201-224, March.
    3. David M. Cutler & James M. Poterba & Louise M. Sheiner & Lawrence H. Summers, 1990. "An Aging Society: Opportunity or Challenge?," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 21(1), pages 1-74.
    4. Ronald Lee & Andrew Mason (ed.), 2011. "Population Aging and the Generational Economy," Books, Edward Elgar Publishing, number 13816.
    5. Andrew Mason & Ronald Lee, 2011. "Population aging and the generational economy: key findings," Chapters, in: Ronald Lee & Andrew Mason (ed.), Population Aging and the Generational Economy, chapter 1, Edward Elgar Publishing.
    6. repec:fth:harver:1490 is not listed on IDEAS
    7. Andrew Mason & Ronald Lee & An-Chi Tung & Mun-Sim Lai & Tim Miller, 2009. "Population Aging and Intergenerational Transfers: Introducing Age into National Accounts," NBER Chapters, in: Developments in the Economics of Aging, pages 89-122, National Bureau of Economic Research, Inc.
    8. William A. Halter & Richard Hemming, 1987. "The Impact of Demographic Change on Social Security Financing," IMF Staff Papers, Palgrave Macmillan, vol. 34(3), pages 471-502, September.
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    1. Gemma Abio & Concepció Patxot & Elisenda Rentería & Guadalupe Souto, 2017. "Intergenerational Transfers in Spain: The Role of Education," Hacienda Pública Española / Review of Public Economics, IEF, vol. 223(4), pages 101-130, December.
    2. Solé, Meritxell & Souto, Guadalupe & Renteria, Elisenda & Papadomichelakis, Giorgos & Patxot, Concepció, 2020. "Protecting the elderly and children in times of crisis: An analysis based on National Transfer Accounts," The Journal of the Economics of Ageing, Elsevier, vol. 15(C).

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