Demographic change and intra and intergenerational distribution: Modelling the impact of different welfare models
Summary and overall aim
The WELTRANSIM project aims to explain the distributional effects induced by the ageing process and how welfare models contribute to mitigating such effects and securing wellbeing across the life cycle (from childhood to old age). Undoubtedly, population ageing changes the distribution of income, public resources and time use. In this respect, different welfare models induce different costs for actors and influence life course risks differently. WELTRANSIM places special emphasis on:
- The distributional effects of education, particularly on causing life-expectancy differentials.
- The potential generational conflict and the possible political pressure of the elderly on shifting resources from the young to the old.
- The effects of changes in family structures and fertility trends in time and money transfers over the life cycle and particularly from/to old people.
In order to answer those questions, the microsimulation model MicroWELT is build combining different data sources. Individuals experience, first, educational transitions. Second, they create households and give birth to children, depending on their educational level. Hence, this model is able to project the impact of ageing, taking into account at the same time changes in the education distribution and family structures. Finally, the model is enriched incorporating the National Transfer Accounts accounting framework. As a result, the model allows analysing the impact of public transfers along the life cycle and its interaction with family transfers and other financing sources based on assets. The model is applied to Austria, Spain, Finland and the UK using comparable data, so that it can be portable to other countries.
WELTRANSIM is one of the projects that is funded in the second joint call on ‘Welfare, wellbeing and demographic change: Understanding welfare models’
1 June 2017 – 31 December 2020 (finished)
- Universitat de Barcelona, Spain: Concepció Patxot (coordinator).
- Finnish Centre for Pensions, Finland: Risto Vaittinen
- VATT Institute for Economic Research, Finland: Marja Riihelä
- Austrian Institute for Economic Research, Austria: Martin Spilauer