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Pro-elderly welfare states within pro-child societies : Incorporating family cash and time into intergenerational transfers analysis

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  • Gál, Róbert Iván
  • Vanhuysse, Pieter
  • Vargha, Lili

Abstract

Households and welfare states both serve as vehicles of lifecycle financing through intergenerational transfers. Working-age people are net contributors, children and the elderly are net beneficiaries. However, there is a marked asymmetry in the socialization of intergenerational transfers. Working-age people pay taxes and social security contributions to care for the elderly as a generation, but they individually spend cash and contribute time to raise their own children. This results in asymmetric visibility of intergenerational transfers. Resources flowing to the elderly are near-fully observed in National Accounts (NA), but inter- and intra-household transfers are not registered there. Using data for ten European countries representing 70 percent of the population of the EU, we employ National Transfer Accounts (NTA) to include private transfers as well. In addition, as an extension of NTA, we use National Time Transfer Accounts (NTTA) to quantify the value of time transferred within and between households in the form of unpaid labor. Only a fifth of all resource transfers to children is registered in NA; another third is made visible by NTA, but nearly half is made visible only by NTTA. Contrary to much perceived wisdom, once intra-familial transfers of cash and time are incorporated, European societies transfer more resources to children than to the elderly.

Suggested Citation

  • Gál, Róbert Iván & Vanhuysse, Pieter & Vargha, Lili, 2016. "Pro-elderly welfare states within pro-child societies : Incorporating family cash and time into intergenerational transfers analysis," CEI Working Paper Series 2016-6, Center for Economic Institutions, Institute of Economic Research, Hitotsubashi University.
    • Handle: RePEc:hit:hitcei:2016-6
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    File URL: https://hermes-ir.lib.hit-u.ac.jp/hermes/ir/re/28195/wp2016-6.pdf
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    References listed on IDEAS

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    1. 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.
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    Cited by:

    1. Lili Vargha & Róbert Iván Gál & Michelle O. Crosby-Nagy, 2017. "Household production and consumption over the life cycle: National Time Transfer Accounts in 14 European countries," Demographic Research, Max Planck Institute for Demographic Research, Rostock, Germany, vol. 36(32), pages 905-944.
    2. Éva Berde & Izabella Kuncz, 2017. "Possible Paths for GDP Per Capita – Simulation with a Demographic Growth Model," Financial and Economic Review, Magyar Nemzeti Bank (Central Bank of Hungary), vol. 16(4), pages 36-57.

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    Keywords

    household economy; young and old; care work; child rearing; families; National Transfer Accounts;
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