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Reallocation between Generations and Genders

Which age groups are net contributors and which are net recipients? The Vienna University of Technology showcases the WWWforEurope Working Paper Number 13, titled "Reallocation of Resources Across Age in a Comparative European Setting" by Bernhard Hammer, Alexia Prskawetz, and Inga Freund. The paper shows differences between genders and takes unpaid work into account.

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Reallocation of Resources Across Age in a Comparative European Setting

Articles on the WWWforEurope Working Paper Number 13, "Reallocation of Resources Across Age in a Comparative European Setting" by Bernhard Hammer, Alexia Prskawetz and Inga Freund.

undefinedDie Presse Article " Die Nettozahler im Lebenskreis", Sept. 21st, 2013

undefinedDie Presse Article "Österreicher werden mit 59 zu Nettoempfängern", Sept. 16th, 2013

undefinedÖsterreich Journal Article, "Umverteilung zwischen Generationen und Geschlechtern", Sept. 16th, 2013 Article, "TU Wien will mit Studie Notwendigkeit einer Pensionsreform nachweisen", Sept. 16th, 2013

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Reallocation of resources across age in a comparative European setting

Life is give and take: People „produce“ income through paid labour, but they also "produce" unpaid labour like cleaning, cooking, or giving care. And everybody consumes during their whole life. But when do people produce more than they consume? When only looking at market income in almost all countries men produce much more than they consume during their working life and they produce much more than women – with very significant, but predictabe differences between countries. However, when unpaid household labour is taken into consideration, women draw level.

Bernhard Hammer, Alexia Fürnkranz-Prskawetz and Inga Freund give a very detailled account of how much men and women in different countries in different age groups produce and consume over their life cycle in their paper "Reallocation of Resources Across Age in a Comparative European Setting".

Obviously during childhood life is almost only about consumption. But when young people reach working age, age- and gender-specific differences appear between countries: In all countries men „produce“ more by paid labour than women, but these differences are small in Scandinavia and large in Continental and even more so in Southern Europe. But all over Europe women contribute by doing unpaid household and care tasks which profits all family members. Again, there are large differences between countries, but on average, women work five hours a day without pay in their households. When this household work is given a market value, the overall picture changes: Women contribute, on average, as much as men and in their „active“ years they produce more than they consume.

The point at which production exceeds consumption in youth is higher than the usual working age limit of 15 years. Conversely, in most countries, the point in higher age at which  consumption exceeds production again lies much lower, for both men and women, than the pension age limit of 65 years. This means, that in the age range of 15 to 65 years, much more people are economically dependent than a strict age-dependency ratio perspective would suggest.  

The paper is a very valuable contribution to the discussion on age-dependency: If you only compare age groups (eg the relation of the 15 to 65 yrs old to those older than 65) you will not get the right conclusions on how to change (or not to change) the pension system. Rather one has to look at actual dependencies during the whole life course: When do people enter the “production” life, how much do they produce compared to their consumption, how much unpaid labour do people (especially women) contribute?

To get an even and fair distribution over the life course for everybody, politicians will have to consider all these facts and find the adequate answers to much more than the question of the retiring age.

And they will have to find a market alternative to unpaid household services, if they want to raise female labour participation: More institutional childcare and more official household help in cleaning, cooking, and caring.

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