TY - JOUR
T1 - Future Changes in Age and Household Patterns
T2 - Some Implications for Public Finances
AU - Højbjerg Jacobsen, Rasmus
AU - Hougaard Jensen, Svend E.
PY - 2014
Y1 - 2014
N2 - Using stochastic forecasting techniques, this paper assesses the consequences for public finances of changes in age and household structures in Denmark over the period 2008–2037. Focusing on components of welfare provisions and tax payments with noticeable differences across age and household status, we show that, based on a point forecast, the fiscal impact of changes in household structures amounts to an annual negative effect of 0.5% of GDP, and the effect of changes in age structures is forecast to worsen the public budget by 3.7% of GDP per year. While being subject to a considerable amount of uncertainty, the prospect of such a dramatic weakening of public finances is likely to trigger demands for welfare reforms characterized by a more individualized system of public transfer and tax payments, in addition to the measures that have already been taken to address the fiscal effects of population ageing.
AB - Using stochastic forecasting techniques, this paper assesses the consequences for public finances of changes in age and household structures in Denmark over the period 2008–2037. Focusing on components of welfare provisions and tax payments with noticeable differences across age and household status, we show that, based on a point forecast, the fiscal impact of changes in household structures amounts to an annual negative effect of 0.5% of GDP, and the effect of changes in age structures is forecast to worsen the public budget by 3.7% of GDP per year. While being subject to a considerable amount of uncertainty, the prospect of such a dramatic weakening of public finances is likely to trigger demands for welfare reforms characterized by a more individualized system of public transfer and tax payments, in addition to the measures that have already been taken to address the fiscal effects of population ageing.
KW - Probability forecasting
KW - Demographic forecasting
KW - Evaluating forecasts
KW - Register data
KW - Public finances
KW - Household composition
U2 - 10.1016/j.ijforecast.2014.05.004
DO - 10.1016/j.ijforecast.2014.05.004
M3 - Journal article
VL - 30
SP - 1110
EP - 1119
JO - International Journal of Forecasting
JF - International Journal of Forecasting
SN - 0169-2070
IS - 4
ER -