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Population ageing and sub-central governments: Long-term fiscal challenges

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  • Céline Colin
  • Bert Brys

Abstract

The population in OECD countries is ageing rapidly, which will have significant macroeconomic impacts, including on public expenditure and tax revenues. This paper analyses the consequences of population ageing at the sub-central government (SCG) levels and introduces the ‘SCG fiscal vulnerability to ageing’ indicator. This indicator identifies the countries in which SCGs on average are “vulnerable” to the ageing of their population from a fiscal perspective (both from the expenditure and revenue side). The paper posits that the economic and fiscal consequences of an ageing population goes beyond the central-SCG boundaries. Therefore, in order to make fiscal frameworks “ageing-resilient”, countries require a coherent fiscal strategy, which focuses on tax and spending reforms, with a whole-of-government approach that brings together central governments and SCGs.

Suggested Citation

  • Céline Colin & Bert Brys, 2019. "Population ageing and sub-central governments: Long-term fiscal challenges," OECD Working Papers on Fiscal Federalism 30, OECD Publishing.
    • Handle: RePEc:oec:ctpaab:30-en
    DOI: 10.1787/00db7ac4-en
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    Cited by:

    1. Malik Manzoor Ahmad & Singh S. P. & Pattanaik Falguni, 2022. "Economics of Healthy Aging in India: A Multidimensional Perspective," IZA Journal of Labor Policy, Sciendo & Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 12(1), pages 1-22, January.

    More about this item

    Keywords

    ageing; demographic change; long-term scenarios; revenue vulnerability; subnational governments;
    All these keywords.

    JEL classification:

    • H20 - Public Economics - - Taxation, Subsidies, and Revenue - - - General
    • H71 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Taxation, Subsidies, and Revenue
    • J14 - Labor and Demographic Economics - - Demographic Economics - - - Economics of the Elderly; Economics of the Handicapped; Non-Labor Market Discrimination

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