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

52 Pages Posted: 24 Jul 2006

See all articles by Thai-Thanh Dang

Thai-Thanh Dang

Organization for Economic Co-Operation and Development (OECD) - Economics Department (ECO)

Herwig Immervoll

Organization for Economic Co-Operation and Development (OECD) - Social Policy Division; World Bank, Europe and Central Asia; IZA Institute of Labor Economics; ISER Institute for Social and Economic Research; University of Canberra - National Centre for Social and Economic Modelling (NATSEM); United Nations - European Centre for Social Welfare Policy and Research

Daniela Mantovani

University of Cambridge - Department of Applied Economics; Prometeia Calcolo

Kristian Orsini

KU Leuven

Holly Sutherland

University of Essex - Institute for Social and Economic Research (ISER)

Date Written: June 2006

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.

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

JEL Classification: C81, D31, H22, H55

Suggested Citation

Dang, Thai-Thanh and Immervoll, Herwig and Immervoll, Herwig and Mantovani, Daniela and Orsini, Kristian and Sutherland, Holly, An Age Perspective on Economic Well-Being and Social Protection in Nine OECD Countries (June 2006). IZA Discussion Paper No. 2173, Available at SSRN: https://ssrn.com/abstract=918715 or http://dx.doi.org/10.2139/ssrn.918715

Thai-Thanh Dang

Organization for Economic Co-Operation and Development (OECD) - Economics Department (ECO) ( email )

2 rue Andre Pascal
Paris Cedex 16, MO 63108
France

Herwig Immervoll (Contact Author)

Organization for Economic Co-Operation and Development (OECD) - Social Policy Division ( email )

2 rue Andre Pascal
Paris Cedex 16, 75775
France
(33 1) 45 24 92 14 (Phone)
(33 1) 44 30 61 78 (Fax)

HOME PAGE: http://www.oecd.org/els/social

World Bank, Europe and Central Asia ( email )

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Washington, DC 20433
United States

IZA Institute of Labor Economics ( email )

P.O. Box 7240
Bonn, D-53072
Germany

HOME PAGE: http://www.iza.org/profile?key=1935

ISER Institute for Social and Economic Research ( email )

Wivenhoe Park
Colchester CO4 3SQ
United Kingdom

HOME PAGE: http://www.iser.essex.ac.uk/people/research-associates

University of Canberra - National Centre for Social and Economic Modelling (NATSEM) ( email )

Canberra, ACT 2601
AUSTRALIA

HOME PAGE: http://www.canberra.edu.au/centres/natsem/people/associates/herwig-immervoll

United Nations - European Centre for Social Welfare Policy and Research ( email )

Berggasse 17
Vienna, A1010
Austria

HOME PAGE: http://www.euro.centre.org

Daniela Mantovani

University of Cambridge - Department of Applied Economics ( email )

Sidgwick Avenue
Cambridge, CB3 9DE
United Kingdom

Prometeia Calcolo

Via G. Marconi, 43
I-40122 Bologna
Italy

Kristian Orsini

KU Leuven ( email )

Oude Markt 13
Leuven, Vlaams-Brabant
Belgium

Holly Sutherland

University of Essex - Institute for Social and Economic Research (ISER) ( email )

Wivenhoe Park
Colchester CO4 3SQ
United Kingdom

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