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An Age Perspective on Economic Well-Being and Social Protection in Nine OECD Countries

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Author Info

  • Dang, Thai-Thanh

    ()
    (OECD)

  • Immervoll, Herwig

    ()
    (OECD, Paris)

  • Mantovani, Daniela

    ()
    (University of Modena and Reggio Emilia)

  • Orsini, Kristian

    ()
    (K.U.Leuven)

  • Sutherland, Holly

    ()
    (ISER, University of Essex)

Abstract

This paper quantifies the economic well-being of different age groups and the extent of their reliance on incomes from public and private sources. The aim is to establish how social benefits, and the taxes needed to finance them, affect income levels and disparities across different age groups. Results are compared across nine OECD countries using household micro-data and microsimulation models to illustrate the influence of market income patterns, household structures and social protection measures on the income distribution among and between different age groups. We use information from the late 1990s to establish a “distributional baseline” that refers to an early phase of the projected increase in dependency ratios and also pre-dates some of the major reforms that are introduced to address these. Results even for this period show that social protection was already largely “old-age” protection, with those aged 65 and over typically receiving almost three times the (net) cash transfers of the average person. In most countries, the incidence of “low” incomes was nevertheless higher among old-age individuals than for the population as a whole. We argue, however, that the cross-country evidence suggests some scope for re-balancing social protection spending without necessarily compromising distributional objectives.

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Bibliographic Info

Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 2173.

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Length: 52 pages
Date of creation: Jun 2006
Date of revision:
Handle: RePEc:iza:izadps:dp2173

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Related research

Keywords: demographics; ageing; social protection; poverty; inequality; microsimulation;

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References

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  1. Corak, Miles & Lietz, Christine & Sutherland, Holly, 2005. "The Impact of Tax and Transfer Systems on Children in the European Union," IZA Discussion Papers 1589, Institute for the Study of Labor (IZA).
  2. Virginia Hernanz & Franck Malherbet & Michele Pellizzari, 2004. "Take-Up of Welfare Benefits in OECD Countries: A Review of the Evidence," OECD Social, Employment and Migration Working Papers 17, OECD Publishing.
  3. Gottschalk, Peter & Smeeding, Timothy M., 2000. "Empirical evidence on income inequality in industrialized countries," Handbook of Income Distribution, in: A.B. Atkinson & F. Bourguignon (ed.), Handbook of Income Distribution, edition 1, volume 1, chapter 5, pages 261-307 Elsevier.
  4. von Weizsacker, Robert K., 1996. "Distributive implications of an aging society," European Economic Review, Elsevier, vol. 40(3-5), pages 729-746, April.
  5. repec:ese:emodwp:em9-01 is not listed on IDEAS
  6. repec:ese:emodwp:em4-05 is not listed on IDEAS
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Cited by:
  1. Marx, Ive & Nolan, Brian & Olivera, Javier, 2014. "The Welfare State and Anti-Poverty Policy in Rich Countries," IZA Discussion Papers 8154, Institute for the Study of Labor (IZA).
  2. repec:ese:emodwp:em7-11 is not listed on IDEAS
  3. Dekkers, Gijs, 2008. "Are the old poor? A discussion and some cursory evidence," MPRA Paper 29436, University Library of Munich, Germany.

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