Abstract WP20-02

This paper discusses the indicators of the economic effects of population ageing developed in the WELTRANSIM project from a comparative welfare state perspective. This analysis includes four countries (Austria, the UK, Finland, and Spain) representing the four different welfare state models in Europe. The results show that indicators based on disaggregated data can give a very distinct – and less pessimistic - picture of the economic effects of population ageing. While this is the case across all countries, the alleviating effects of composition changes driven by education expansion are particularly powerful in Spain. Based on aggregate data, Spain would be the country most hit by population ageing; when accounting for composition effects, it is moved to a comparatively favourable position. Substantial differences in indicators also arise in the UK. While less hit by population ageing and further educational improvements being modest, the high differences in income between education groups – and the liberal welfare state regime focusing on poverty prevention - amplify the alleviating effect of composition changes. Besides adding realism to projections of the impact of ageing on the economy, our approach also allows addressing and disentangling the role of different welfare state regimes and the effects of educational improvements.