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![Page 1: National Transfer Accounts: Concepts and results for Chile Jorge Bravo, U.N. Population Division Mauricio Holz, ECLAC/CELADE Presentation at the Expert.](https://reader036.fdocuments.us/reader036/viewer/2022062413/5a4d1b3f7f8b9ab0599a06e8/html5/thumbnails/1.jpg)
National Transfer Accounts: Concepts and results for Chile
Jorge Bravo, U.N. Population DivisionMauricio Holz, ECLAC/CELADE
Presentation at the Expert Group Meeting on Age Structural Transitions, Vienna, Austria, 7-
9 October 2008
![Page 2: National Transfer Accounts: Concepts and results for Chile Jorge Bravo, U.N. Population Division Mauricio Holz, ECLAC/CELADE Presentation at the Expert.](https://reader036.fdocuments.us/reader036/viewer/2022062413/5a4d1b3f7f8b9ab0599a06e8/html5/thumbnails/2.jpg)
NTA Concepts
• NTAs measure, at the aggregate level, reallocations of economic resources across persons of different ages;
• The framework considers the various ways and mechanisms through which the life cycle deficit (LCD) is financed over the lifecycle:
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The reallocation framework
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NTA significanceProvides comprehensive framework to study,
among other: a) intergenerational reallocation of resources
across countries and over time;b) generational equity of public and private
transfer systems, and to better analyze policy options;
c) population and economic growth, including demographic dividends;
d) life-cycle saving behavior
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NTA project: funding and participants
• Funding by NIA, MacArthur Foundation, UNFPA, IDRC, and participating centers
• Leaders are Ronald Lee, University of California, Berkeley, and Andrew Mason, East-West Center, Honolulu;
• Centers and Researchers in: …
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NTA project• 25 countries (October 2008)
Project website: http://www.ntaccounts.org/
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Summary NTA equation
Lifecycle deficit Asset-based reallocations Net public transfers Net private transfers
Net transfers
Age reallocations
l A g g f fC Y Y S
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Results for Chile, 1987-97
Figure 1. Life Cycle Deficit, Chile 1997
0
500,000
1,000,000
1,500,000
2,000,000
2,500,000
0 5 10 15 20 25 30 35 40 45 50 55 60 65 70 75 80 85 90Age
Pes
os
Labor IncomeSelf-Employed IncomePrivate ConsumptionPublic ConsumptionTotal Consumption
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Figure 2. Per-Capita in kind Transfers, Chile 1997
0
50,000
100,000
150,000
200,000
250,000
300,000
350,000
400,000
450,000
500,000
0 5 10 15 20 25 30 35 40 45 50 55 60 65 70 75 80 85 90
Age
Pes
os
EducationHealthOthersTotal Public Consumption
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Figure 3. Per-capita Public Inflows, Chile 1997
-
200
400
600
800
1,000
1,200
1,400
1,600
0 5 10 15 20 25 30 35 40 45 50 55 60 65 70 75 80 85 90
Thou
sand
pes
os
Cash
In-kind
Total
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Figure 4. Impact of cash transfers on rates poverty by age group, Chile 1998
Chile 1998
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
0-9 10--19 20-29 30-39 40-49 50-59 60-69 70-79 80-89 90-99 Age
Source: CASEN 1998
%
Excluding in cash public transfersIncluding in cash public transfers
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Source: ECLAC (2007) Social Panorama 2007
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Source: ECLAC (2007) Social Panorama 2007
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Source: ECLAC (2007) Social Panorama 2007
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Source: ECLAC (2007) Social Panorama 2007
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Figure 5. Per-capita Public Outflows, Chile 1997
0
100
200
300
400
500
600
700
800
0 10 20 30 40 50 60 70 80 90
Thou
sand
s
Value Added Taxes
Taxes On ProductionIndirect Taxes
Direct Taxes
Social Contributions
Other TaxesTotal Taxes
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Figure 6. Net (aggregate) public transfers, Chile 1997
-150,000
-100,000
-50,000
0
50,000
100,000
150,000
Mill
ions
Age
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Figure 7. Per-Capita private transfers,Chile 1997
(2,000,000)
(1,500,000)
(1,000,000)
(500,000)
-
500,000
1,000,000
1,500,000
0 5 10 15 20 25 30 35 40 45 50 55 60 65 70 75 80 85 90
Age
Peso
s
Private transfers inflowsPrivate transfers outflowsNet private transfers
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Figure 8. Asset Reallocation, Chile 1997
-500,000
0
500,000
1,000,000
1,500,000
2,000,000
2,500,000
3,000,000
0 5 10 15 20 25 30 35 40 45 50 55 60 65 70 75 80 85 90
Age
Peso
s Asset-Based Reallocations Asset Income Saving
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Figure 9. Finance of Consumption, Chile 1997
20%51%
21%13%
-22%
25%53%
59%
-44%
-20% -4%
7%
39%
44% 30%127%
-100%
-50%
0%
50%
100%
150%
200%
0-25 26-54 55+ 65+
Age
Asset BasedReallocationsNet Private Transfers
Net Public Transfers
Labor Income
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Changes in LCD 1987-1997
• Significant increase in consumption levels, including education expenditures;
• Large age shift in labor income, reflecting longer education span and postponement of retirement;
• Longer tax-paying lifespan and greater accumulation of assets
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Public and private education• Education policies during the 1980s aimed at
improving efficiency, included decentralization, introduction of vouchers, and expansion of private universities. During the 1990s and 2000 policies have increased equity, targeting lower-income families in all education levels
• Per-capita expenditures in education increased substantially 50% (56% public, 40% private), and coverage has risen, but there remains much room for improvement
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Consumption in Education, Chile 1987-1997 (relative to average labor income 30-49)
-0.02
0
0.02
0.04
0.06
0.08
0.1
0.12
0 5 10 15 20 25 30 35 40 45 50 55 60 65 70 75 80 85 90
Age
Private Education 1997Private Education 1987Public Education 1997Public Education 1987
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School Attendance Rates, Chile 1987-2006
0%
20%
40%
60%
80%
100%
0 5 10 15 20 25
Age
Rates of Attendance 1987Rates of Attendance 1997Rates of Attendance 2006
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Conclusions
• The Chilean labor income and consumption age profiles, net producer and net taxpayer life-spans are close to the average of Latin American countries;
• The fairly extensive coverage of education, health, and social security public programs transfer substantial resources, especially to children and the elderly;
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Conclusions (cont.)• Cash transfers (1/3 of all public transfers) are
mostly pensions that benefit mainly the elderly, and represent by far the largest per-capita government transfer program. It will continue to expand in the public budget because of recent reforms and population ageing, but:
• children and youth, as a group, receive as much in public benefits than the elderly. 2/3 of all transfers are in-kind, which are targeted to children and adults of all ages, and are much more progressive in their distributive incidence;
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Conclusions (cont.)• All adults make and receive private transfers, but
in the net, they are important as a source of finance of consumption only for children;
• Adults rely heavily on their own labor income and asset reallocations (more than 2/5 of their consumption), a source that will probably continue to increase in the future;
• Public education expenditures have increased substantially and equity in the system has improved, but much progress can still be made in reducing socioeconomic gaps in attendance and the quality of education if the demographic dividend is to be taken advantage of.