Paper #983

Title:

Social spending and demographics: The role of public policies in the intergenerational redistribution of income. Empirical evidence from Spain and Catalonia

Authors:

Guillem López and Ana Mosterin

Date:

November 2006

Abstract:

The demographic shift underway in Southern Europe requires a revision of some of the fundamental principles of the traditional welfare state. We analyze the evolution of several aspects of welfare and social expenditure over the last two decades. We find that in the context of the present demographic changes and real estate boom current social and pension policy leads to a new distribution of benefits and burdens which is highly intergenerationally unequal. We argue for a revised definition of public policy based on Musgrave's proposition as a possible rule for an intergenerationally fair distribution.

Keywords:

Elderly, young, Musgrave, intergenerational equity, pensions, social expenditure, life cycle, income distribution, welfare state

JEL codes:

I32, I38, J14, H53, H55

Area of Research:

Labour, Public, Development and Health Economics

CRES Series number:

49

Published in:

Nota d'Economia n. 86, forthcoming

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