The European Centre for Social Welfare Policy and Research supports the Sustainable Development Goals
As noted in the Reflection Paper on the Social Dimension of Europe, “ageing also brings the question of intergenerational fairness to the fore. There is today a real risk of a generational divide between younger and older people in terms of decision-making, wealth, material security and access to housing as well as in terms of sharing the financial and fiscal burden of an ageing society.” However, structural reforms and the design of tax and benefit systems can mitigate or aggravate such intergenerational inequalities in the short term with long-term consequences. European social protection systems perform an important role of automatic stabilisation in times of economic shock. This was seen, for instance, in the 2008/9 economic crisis in which many European countries mitigated the worst effects of the crisis through the tax benefit systems. However, in some Member States, tight fiscal space led to the need for consolidation through discrete policy choices, some of which impacted on different parts of the population differently. At the same time, some structural aspects of the social benefit system (e.g. indexation of pensions) may have contributed to generational inequalities.
The purpose of this study is to pursue an assessment of various possible policy choices while providing a methodology for assessing intergenerational fairness. Specifically, the European Centre will be responsible for addressing the following research questions:
For the analysis we will use the tax-benefit microsimulation model EUROMOD. We will focus on the years 2007, 2009 and 2011. Hence, data of the EU-SILC waves of 2008, 2010 and 2012 will be used. In order to assess the underlying effects leading to a potential shift in the income distribution between generations in the course of the economic crisis, the effects of discretionary policy changes, automatic stabilisers (such as progressive tax systems, unemployment or social assistance benefits) and socio-economic and demographic characteristics of the population will have to be disentangled. In terms of policy recommendations, we will compare the simulated disposable income of an individual/household before and after the hypothetical reforms, thus, keeping all other effects constant. The selection of policies will not focus a priori on younger age groups. Instead, we will first check who benefitted/lost in the aftermath of the crisis in the different Member States and then choose relevant policies.
The European Centre for Social Welfare Policy and Research supports the Sustainable Development Goals
