On the effect of forward and backward family transfers on capital accumulation (Gema Abio, Concepció Patxot, Miguel Sánchez Romero, and Guadalupe Souto)
There is an ongoing debate on the extent to which the demographic transition occurring in most developed countries is driven by economic factors. In this context, it is clear that the role of the welfare state is not neutral as long as it alters the way in which resources move across age groups in the economy. In this paper we aim to shed light on this issue by developing an overlapping generations model calibrated using the National Transfer Accounts (NTA) data set, which contains the flow of resources moving from one age group to another by means of private and public transfers or through the capital market. By assuming that the observed set of public and private transfers—and other key variables measured in the NTA estimates—are constant in the future, we analyze the extent to which savings—the residual variable in NTA—and wealth are affected by demographic change. Cross-country comparisons will allow as to disentangle the role of public and private transfers on capital accumulation.