Changing patterns of transfers in Slovenia in the last three decades: transition from a socialist economy to a market economy

ABSTRACT

Rapid population ageing increases interest in economic flows across ages and intergenerational transfers in general. This article uses the National Transfer Accounts methodology to measure consumption and production at each age, and how the difference between consumption and production is financed through (private and public) transfers and the interaction with assets, i.e. ‘asset-based reallocations’. During working ages, people earn more than they consume and with the surplus they finance the deficit of the young and old generations who consume more than they produce. Such a pattern of economic dependency is universal across countries and across time, but huge differences exist in the ages at which individuals produce more than they consume and vice versa. Moreover, the importance of private and public transfers and asset-based reallocations varies across countries and times. In the last three decades, life expectancy at birth in Slovenia increased by 9.3 years, while the age span in which production exceeds consumption narrowed rather than increased. Child dependents are predominantly financed by private transfers, whereas the elderly mainly rely on public transfers. Young and old individuals increasingly rely on public transfers. Together with rapid population ageing, this is likely to jeopardise the public finance system in the future.

KEYWORDS:

• National transfer accounts
• public transfers
• private transfers
• socialism
• Slovenia

Acknowledgments

This article uses data from Eurostat, Cross-sectional EU-SILC UDB, 2009, 2011, 2013. We herewith acknowledge data provision for EU-SILC by Eurostat and the European Commission, respectively. The responsibility for all conclusions drawn from the data lies entirely with the authors. We are grateful to the Statistical Office of the Republic of Slovenia for provision of the data. We gratefully acknowledge Mr Andrej Flajs for all of his help with the aggregate controls calculated for the years 1983 and 1988.

Disclosure statement

No potential conflict of interest was reported by the authors.

Additional information

Funding

This project received funding from the European Union’s Seventh Framework Programme for Research, Technological Development and Demonstration under grant agreement 613247. We also acknowledge that this article is based upon work from COST Action IS1409, supported by COST (European Cooperation in Science and Technology); Seventh Framework Programme [613247].