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 background Benefits 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 background Taxes Local income taxes around 30 percent State income taxes percent above ceiling –Ceiling around $ Payroll taxes and fees 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

Tax/GDP ratio

Public consumption per capita 2003

Public consumption total and per capita 2003

For the individual care (in end of life) dominates

Public consumption total and per capita 2003 In the aggregate education dominates For the individual care (in end of life) dominates

Private consumption per capita note the different scales private consumption Capital cons (housing rentals) Private health consumptionPrivate education consumption Private other consumption Capital consumption (housing rentals)

Private consumption per capita note the different scales Private other consumption Capital consumption (housing rentals) Private health consumptionPrivate education consumption

Private consumption per capita note the different scales Private other consumption Capital consumption (housing rentals) Private health consumptionPrivate education consumption

Private consumption per capita note the different scales Private other consumption Capital consumption (housing rentals) Private health consumptionPrivate education consumption

Private consumption per capita note the different scales Private other consumption Capital consumption (housing rentals) Private health consumptionPrivate education consumption

Put together

Aggregate consumption & gross income 2003 (unadjusted)

1940s boomers

Aggregate consumption & gross income 2003 (unadjusted) 1940s boomers 1960s boomers

Aggregate consumption & gross income 2003 (unadjusted) 1940s boomers 1960s boomers 1980s boomers

Per capita labor income and consumption

Aggregate labor income and consumption

Life cycle deficit

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 2003 Income and transfers per capita (not adjusted) Factor income Non-tax transfers Taxed private transfers Taxed public transfers Total

Age profile Sweden 2003 Income taxes with and without transfer taxes Tax ratio incl transfer tax

Age profile Sweden 2003 Income taxes with and without transfer taxes Tax ratio incl transfer tax 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%

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.