Population Ageing and Distributional Concerns

This presentation will look at the transformation of the welfare state from the perspective of increasing spending on various elderly and health care services. One of the main arguments of the presentation is that a new distributional paradigm put forward through demographic and structural changes is emerging. The presentation has two objectives: 1) It examines the distribution of elderly and health care spending across the Finnish population with register data on the use of services in 2011. 2) With macro-level data from the EU countries, it analyses policies and social spending targeted to different age groups in the society and discusses how their balance has changed in the past two decades.

The increasing spending on elderly care services raises distributional concerns as the welfare state paradigm shifts to new forms of spending and new types of beneficiaries. Countries already display considerable imbalances in the distribution of public spending for today’s young and old generations.If we spend more money on old age in-kind benefits, who benefits the most? Do all ageing citizens benefit equally and to what extent this development in spending patterns digs a gap between generations? Are there signs of proportionally more pro-elderly spending as the median voter’s age increases? The topic is politically even more relevant in the midst of the current economic crisis when social budgets are being cut, welfare state policies recalibrated and intergenerational justice is emerging as a significant policy issue.  

The preliminary analyses with the Finnish register data indicate that the distribution of old age in-kind benefits has a remarkably pro-poor pattern. The final article will investigate further if this is explained by the greater morbidity of the elderly in lower income classes or if the result is connected to other socioeconomic factors, such as living alone or older age.