Abstract WP17-04

Pro-Elderly Welfare States within Child-Oriented Societies

Róbert Iván Gál(a) Pieter Vanhuysse,(b c) and Lili Vargha(d)

June 20, 2017

(a) Senior Researcher, Hungarian Demographic Research Institute, Buday Laszlo utca 1-3, 1024 Budapest, Hungary; e: gal@demografia.hu

(b) Corresponding author (c) Professor of Comparative Welfare State Research, Department of Political Science and Public Management, University of Southern Denmark, Campusvej 55, 5230 Odense M, Denmark; e: vanhuysse@sam.sdu.dk

(d) Doctoral researcher, Hungarian Demographic Research Institute and University of Pécs, Doctoral School of Demography and Sociology, Zsolnay Vilmos utca 16. E 25, 7622 Pécs, Hungary; e: vargha@demografia.hu

Abstract: Households and policies are the main vehicles of intergenerational transfers. Working-age people are net contributors; children and older persons net beneficiaries. However, there is an asymmetry in socialization. Working-age people pay taxes and social security contributions to institutionalize care for older persons as a generation, but invest private resources to raise their own children, often with large social returns. This results in asymmetric statistical visibility. Elderly transfers are near-fully observed in National Accounts; those to children much less. Analysing ten European societies, we employ National Transfer Accounts to include public and private transfers and National Time Transfer Accounts to value unpaid household labour. All three channels combined, children receive more per capita resources (73 percent of prime-age labour income) than older persons (31 percent). Europe is a continent of pro-elderly welfare states and strongly child-oriented parents. Since children are public goods, why has investment in them not been socialized more?

Key words: household economy; human capital; intergenerational policies; parental investment; National Transfer Accounts; National Time Transfer Accounts