Welfare state and the age distribution of public consumption and public transfers in the EU countries

Abstract

The article extends the discussion of the welfare state in the literature by presenting a quantitative assessment of the age distribution of public resources. It investigates the differences in the distribution of public transfers between age groups in different European welfare state regimes using the National Transfer Accounts approach. There are two groups of countries that stand out in terms of the age patterns of their public transfers: three Scandinavian countries and Luxembourg have relatively high transfer levels, particularly for the older age group; while some of the Central and Eastern European countries have relatively low transfer levels. In the other European countries, the age profiles of public transfers are close to the EU average. Total public expenditures and revenues in the two distinct groups are changing in response to population ageing: i.e. they are expanding in the Scandinavian countries, and they are contracting in the CEE countries. These developments may lead to the further divergence of these welfare regimes.