Public finance consolidation and fairness across living generations: the case of Italy
AbstractThe paper is a contribution to the study of the redistributive impact of public sector intervention across living generations. We aim to work on a comprehensive approach, so that reforms involving several taxation and spending programmes, possibly implemented over several years, may be assessed. By adapting methods from the generational accounting literature, we investigate the impact on fairness between living generations of fiscal policies undertaken in Italy between 1990 and 2008. Large intergenerational differences exist in net tax rates calculated over the residual lifetime horizon, which tend to be substantially higher for young generations. Pension reforms introduced in the '90s play a major role in explaining these differences. We conclude that a significant contribution to the sustainability of these reforms might have come at the price of an unequal distribution of sacrifices across living generations. Awareness of these differences could help in designing additional consolidation efforts in the perspective of achieving intergenerational fairness in Italy.
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Bibliographic InfoPaper provided by University of Verona, Department of Economics in its series Working Papers with number 04/2012.
Date of creation: Jan 2012
Date of revision:
Intergenerational equity; generational accounting; fiscal policy;
Find related papers by JEL classification:
- H30 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - General
- H50 - Public Economics - - National Government Expenditures and Related Policies - - - General
- H60 - Public Economics - - National Budget, Deficit, and Debt - - - General
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