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An age perspective on economic well-being and social protection in nine OECD countries

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  • Dang, Thai-Thanh
  • Immervoll, Herwig
  • Mantovani, D.
  • Orsini, Kristian
  • Sutherland, Holly

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 (Finland, France, Germany, Italy, Luxembourg, Norway, Sweden, United Kingdom and United States) 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.

Suggested Citation

  • Dang, Thai-Thanh & Immervoll, Herwig & Mantovani, D. & Orsini, Kristian & Sutherland, Holly, 2006. "An age perspective on economic well-being and social protection in nine OECD countries," EUROMOD Working Papers EM3/06, EUROMOD at the Institute for Social and Economic Research.
  • Handle: RePEc:ese:emodwp:em3-06
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    References listed on IDEAS

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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," EUROMOD Working Papers EM4/05, EUROMOD at the Institute for Social and Economic Research.
    2. 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.
    3. James Williamson & Timothy Smeeding, 2004. "Sliding into Poverty? Cross-National Patterns of Income Source Change and Income Decay in Old Age," LIS Working papers 388, LIS Cross-National Data Center in Luxembourg.
    4. 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.
    5. Sutherland, Holly, 2001. "EUROMOD: an integrated European benefit-tax model: final report," EUROMOD Working Papers EM9/01, EUROMOD at the Institute for Social and Economic Research.
    6. Susanna Sandström & Timothy Smeeding, 2005. "Poverty and Income Maintenance in Old Age: A Cross-National View of Low Income Older Women," LIS Working papers 398, LIS Cross-National Data Center in Luxembourg.
    7. von Weizsacker, Robert K., 1996. "Distributive implications of an aging society," European Economic Review, Elsevier, vol. 40(3-5), pages 729-746, April.
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    Cited by:

    1. Ive Marx & Brian Nolan & Javier Olivera, 2014. "The Welfare State and Anti-Poverty Policy in Rich Countries," Working Papers 1403, Herman Deleeck Centre for Social Policy, University of Antwerp.
    2. Dekkers, Gijs, 2008. "Are the old poor? A discussion and some cursory evidence," MPRA Paper 29436, University Library of Munich, Germany.
    3. Figari, Francesco & Matsaganis, Manos & Sutherland, Holly, 2011. "The financial well-being of older people in Europe and the redistributive effects of minimum pension schemes," EUROMOD Working Papers EM7/11, EUROMOD at the Institute for Social and Economic Research.

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    More about this item

    JEL classification:

    • C81 - Mathematical and Quantitative Methods - - Data Collection and Data Estimation Methodology; Computer Programs - - - Methodology for Collecting, Estimating, and Organizing Microeconomic Data; Data Access
    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • H22 - Public Economics - - Taxation, Subsidies, and Revenue - - - Incidence
    • H55 - Public Economics - - National Government Expenditures and Related Policies - - - Social Security and Public Pensions

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