Is there a connection between welfare regimes and inter-age reallocation systems?

Abstract

Abstract Previous research connecting transfers and welfare regimes is to some extent limited, as it focuses mainly on either public or private transfers or it takes into account only certain age groups. This paper uses the recently developed National Transfer Accounts (NTA) methodology that enables comprehensive measurement of (1) public and (2) private intergenerational transfers (the ones that go through monetary transactions and those that result from the family provision of welfare in terms of unpaid work), as well as (3) asset-based reallocations resulting from interaction with capital and financial markets. Moreover, we take into account all age groups and the gender dimension as well. Our analysis provides comparable NTA results for 10 EU countries from 2010 and links welfare regimes and inter-age reallocation systems. The paper contributes mainly to the existing welfare regimes’ literature by incorporating several dimensions of welfare domains, also those usually criticized as not being included in the Esping-Andersen’s (1990) initial typology of welfare regimes (for example, by including care responsibilities provided by both genders). Based on five indicators, we show a clear connection between welfare regimes and inter-age reallocation systems and classify countries into three different groups: social-democratic (Hungary, Slovenia, and Sweden), conservative (Austria, Finland, France, Italy, and Spain), and liberal (Germany and the United Kingdom). Germany is the main exception; based on inter-age reallocation results, it is not characterized as a prototypical conservative welfare state, but rather as a liberal welfare state.