National Transfer Accounts Indicators of Economic Dependency in the EU Countries

Abstract

In the coming decades, the aging of European population will continue at a rapid pace. The National Transfer Accounts (NTA) methodology breaks down the income and consumption by age to analyze the impact of population aging on economic sustainability and economy in general. This chapter uses fully comparable results of NTA for 25 European Union countries in 2010 to indicate the potential increase in dependency in the future given the current institutional setting. Next to the conventionally defined demographic dependency ratio, we add (1) the NTA dependency ratio using the age patterns of production and consumption in the market and (2) the National Time Transfer Accounts dependency ratio using age patterns of production and consumption originating from unpaid work that is mostly provided within the households. The authors show that imbalances will originate from the impact of population aging on market part of the economy. Further, some imbalances will also be coming from unpaid work but of much lesser extent.

Citation

Sambt, J. and Istenič, T. (2020), "National Transfer Accounts Indicators of Economic Dependency in the EU Countries", Žabkar, V. and Redek, T. (Ed.) Challenges on the Path Toward Sustainability in Europe, Emerald Publishing Limited, Leeds, pp. 191-207. https://doi.org/10.1108/978-1-80043-972-620201011