Intergenerational public sector redistribution in Sweden 2003 Charlotte Forsell, Daniel Hallberg,...

Intergenerational public sector redistribution in Sweden 2003

Charlotte Forsell, Daniel Hallberg, Thomas Lindh and Gustav Öberg

Prepared for the annual meeting of the National Transfer Accounts project on January 19 and 20 of 2007 in Berkeley

Swedish institutional backgroundBenefits

• Comprehensive social income insurance– Sickness– Unemployment– Parental leave

• Nominal fee health care provisions• Free education at all levels (incl

subsidised student loans for consumption expenses)

• Notional defined contribution pensions

Swedish institutional backgroundTaxes

• Local income taxes around 30 percent• State income taxes 20-25 percent above ceiling

– Ceiling around $50 000

• Payroll taxes and fees 40-50 percent on top of gross income

• Capital income tax flat rate 30 percent• Wealth and real estate taxes around 2 percent• Value added taxes 6, 12 and 25 percent

Share of public and private cons 1950-2005

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

1950 1955 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005

Private

Public

Tax/GDP ratio 1950-2004

0

10

20

30

40

50

60

1950 1955 1960 1965 1970 1975 1980 1985 1990 1995 2000

Per

cen

t sh

are

of

GN

P

Public consumption per capita 2003

0

10 000

20 000

30 000

40 000

50 000

60 000

70 000

80 000

90 000

0 10 20 30 40 50 60 70 80 90 100

0

50000

100000

150000

200000

250000

300000

Child care Health care

Education Other public consumption

Elderly assistance and care (right axix)

Public consumption total and per capita 2003

0

2 000 000 000

4 000 000 000

6 000 000 000

8 000 000 000

10 000 000 000

12 000 000 000

14 000 000 000

16 000 000 000

0 10 20 30 40 50 60 70 80 90 100

0

50 000

100 000

150 000

200 000

250 000

300 000

350 000

400 000

450 000

Public consumption total Public consumption total per capita (right axis)


0

2 000 000 000

4 000 000 000

6 000 000 000

8 000 000 000

10 000 000 000

12 000 000 000

14 000 000 000

16 000 000 000

0 10 20 30 40 50 60 70 80 90 100

0

50 000

100 000

150 000

200 000

250 000

300 000

350 000

400 000

450 000


For the individual care (in end of life) dominates


0

2 000 000 000

4 000 000 000

6 000 000 000

8 000 000 000

10 000 000 000

12 000 000 000

14 000 000 000

16 000 000 000

0 10 20 30 40 50 60 70 80 90 100

0

50 000

100 000

150 000

200 000

250 000

300 000

350 000

400 000

450 000


In the aggregate education dominates

For the individual care (in end of life) dominates

Private consumption per capitanote the different scales

-200000

20000400006000080000

100000120000140000160000

0_4

5_9

10_1

4

15_1

9

20_2

4

25_2

9

30_3

4

35_3

9

40_4

4

45_4

9

50_5

4

55_5

9

60_6

4

65_6

9

70_7

4

75_7

9

80_

CFX

cil

cih

private consumption Capital cons (housing rentals)

Private health consumption Private education consumption

Private other consumption Capital consumption (housing rentals)


0

10000

20000

30000

40000

50000

60000

0_4

5_9

10_1

4

15_1

9

20_2

4

25_2

9

30_3

4

35_3

9

40_4

4

45_4

9

50_5

4

55_5

9

60_6

4

65_6

9

70_7

4

75_7

9

80_

CFK

cil

cih

-200000

20000400006000080000

100000120000140000160000

0_4

5_9

10_1

4

15_1

9

20_2

4

25_2

9

30_3

4

35_3

9

40_4

4

45_4

9

50_5

4

55_5

9

60_6

4

65_6

9

70_7

4

75_7

9

80_

CFX

cil

cih




-5000

0

5000

10000

15000

20000

0_4

5_9

10_1

4

15_1

9

20_2

4

25_2

9

30_3

4

35_3

9

40_4

4

45_4

9

50_5

4

55_5

9

60_6

4

65_6

9

70_7

4

75_7

9

80_

CFH

cil

cih

0

10000

20000

30000

40000

50000

60000

0_4

5_9

10_1

4

15_1

9

20_2

4

25_2

9

30_3

4

35_3

9

40_4

4

45_4

9

50_5

4

55_5

9

60_6

4

65_6

9

70_7

4

75_7

9

80_

CFK

cil

cih

-200000

20000400006000080000

100000120000140000160000

0_4

5_9

10_1

4

15_1

9

20_2

4

25_2

9

30_3

4

35_3

9

40_4

4

45_4

9

50_5

4

55_5

9

60_6

4

65_6

9

70_7

4

75_7

9

80_

CFX

cil

cih




-2000

-1000

0

1000

2000

3000

4000

5000

6000

0_4

5_9

10_1

4

15_1

9

20_2

4

25_2

9

30_3

4

35_3

9

40_4

4

45_4

9

50_5

4

55_5

9

60_6

4

65_6

9

70_7

4

75_7

9

80_

CFE

cil

cih

-5000

0

5000

10000

15000

20000

0_4

5_9

10_1

4

15_1

9

20_2

4

25_2

9

30_3

4

35_3

9

40_4

4

45_4

9

50_5

4

55_5

9

60_6

4

65_6

9

70_7

4

75_7

9

80_

CFH

cil

cih

0

10000

20000

30000

40000

50000

60000

0_4

5_9

10_1

4

15_1

9

20_2

4

25_2

9

30_3

4

35_3

9

40_4

4

45_4

9

50_5

4

55_5

9

60_6

4

65_6

9

70_7

4

75_7

9

80_

CFK

cil

cih

-200000

20000400006000080000

100000120000140000160000

0_4

5_9

10_1

4

15_1

9

20_2

4

25_2

9

30_3

4

35_3

9

40_4

4

45_4

9

50_5

4

55_5

9

60_6

4

65_6

9

70_7

4

75_7

9

80_

CFX

cil

cih



Put together

Per capita

0.00

0.20

0.40

0.60

0.80

1.00

1.20

1.40

1.60

0 10 20 30 40 50 60 70 80 90 100

per

YL

30-

49 Y

O

Aggregate consumption & gross income 2003 (unadjusted)

05 000 000 000

10 000 000 00015 000 000 00020 000 000 00025 000 000 00030 000 000 00035 000 000 00040 000 000 000

0 10 20 30 40 50 60 70 80 90 100

020 00040 00060 00080 000100 000120 000140 000160 000

Total gross income Total consumption Population (right axis)


05 000 000 000

10 000 000 00015 000 000 00020 000 000 00025 000 000 00030 000 000 00035 000 000 00040 000 000 000

0 10 20 30 40 50 60 70 80 90 100

020 00040 00060 00080 000100 000120 000140 000160 000


1940s

boomers


05 000 000 000

10 000 000 00015 000 000 00020 000 000 00025 000 000 00030 000 000 00035 000 000 00040 000 000 000

0 10 20 30 40 50 60 70 80 90 100

020 00040 00060 00080 000100 000120 000140 000160 000


1940s

boomers1960s

boomers


05 000 000 000

10 000 000 00015 000 000 00020 000 000 00025 000 000 00030 000 000 00035 000 000 00040 000 000 000

0 10 20 30 40 50 60 70 80 90 100

020 00040 00060 00080 000100 000120 000140 000160 000


1940s

boomers1960s

boomers

1980s

boomers

Per capita labor income and consumption

0.00

0.20

0.40

0.60

0.80

1.00

1.20

1.40

1.60

0 10 20 30 40 50 60 70 80 90 100Adjusted consumption, per capita, PrivateAdjusted consumption, per capita, Publicadjusted labor income, per capita

Aggregate labor income and consumption

0.00

0.20

0.40

0.60

0.80

1.00

1.20

1.40

1.60

0 10 20 30 40 50 60 70 80 90 100

Adjusted consumption, totals Private

Adjusted consumption, totals Public

adjusted labor income, totals

Life cycle deficit

0.00

0.20

0.40

0.60

0.80

1.00

1.20

1.40

1.60

0 10 20 30 40 50 60 70 80 90 100

Adjusted consumption, totals Private

Adjusted consumption, totals Public

adjusted labor income, totals

0.00

0.20

0.40

0.60

0.80

1.00

1.20

1.40

1.60

0 10 20 30 40 50 60 70 80 90 100

Adjusted consumption, per capita, Private

Adjusted consumption, per capita, Public

adjusted labor income, per capita

-2.00

-1.50

-1.00

-0.50

0.00

0.50

1.00

1.50

0 10 20 30 40 50 60 70 80 90 100

LCD, totals, Public LCD, totals, Private

-2.00

-1.50

-1.00

-0.50

0.00

0.50

1.00

1.50

0 10 20 30 40 50 60 70 80 90 100

LCD, per capita, Public LCD, per capita, Private

Swedish institutional background

• Income related transfers are taxed

• Taxes/GDP around 50 percent

• Feedback revenue from transfers calculated to be around 45 percent over the life cycle

• Interesting to see how that is distributed over age groups

Age profiles Sweden 2003Income and transfers per capita

(not adjusted)

0

50000

100000

150000

200000

250000

300000

350000

0 10 20 30 40 50 60 70 80 90 100

LI+CI NT TT nonpubl TT publ Total

Factor income

Non-tax transfers Taxed private

transfers

Taxed public

transfers

Total

Age profile Sweden 2003Income taxes with and without transfer taxes

0.00

0.10

0.20

0.30

0.40

0.50

20 30 40 50 60 70 80 90 100

TR1

Tax ratio incl transfer tax

Age profile Sweden 2003Income taxes with and without transfer taxes


0.00

0.10

0.20

0.30

0.40

0.50

20 30 40 50 60 70 80 90 100

TR1 TR2


Tax ratio excl transfer tax

Age profiles of taxes and public taxable transfers change!

• Per capita tax payer age drops from 55 to 48• Per capita taxes paid drops by 23.2%• Per capita transfer recipient age increases 71 to 73• Per capita transfers recieved drops by 17.1%

-150 000

-100 000

-50 000

0

50 000

100 000

150 000

0 10 20 30 40 50 60 70 80 90 100

Taxes with feedback Taxes w/o feedback

Taxable transfers Net taxable transfers

To be done

• Private consumption data longer back?

• Assest based reallocation

• Inheritage, private transfers, time-use?

• Data from a recent government study on intergenerational transfers via the public sector; this incl full individual time series back to 1930s

Thank you.

Intergenerational public sector redistribution in Sweden 2003 Charlotte Forsell, Daniel Hallberg,...

Documents

Transcript of Intergenerational public sector redistribution in Sweden 2003 Charlotte Forsell, Daniel Hallberg,...