Abstract WP18-01

Generational Distribution of Consumption and Income in Poland in the Context of Population Ageing

Agnieszka Chłoń-Domińczak and Wojciech Łątkowski

NTA Working Paper 18-01

March 2018

JEL No. J11, J21

ABSTRACT

Population ageing in Poland will lead to pronounced changes in the age structures, which will have significant macroeconomic consequences and impact the levels of consumption and labour income of future generations. Using the National Transfer Accounts for Poland we quantify the impact of population ageing on lifecycle deficit. Changes in the size and age structure of population, if the current consumption and labour income profiles are not changed, will lead to a fast decline of total labour income and slower decline of consumption. As a result, the lifecycle deficit will be increasing. Furthermore, the share of lifecycle deficit attributed to older population, whose consumption is financed mainly from public pension transfers. Our results indicate the need to introduce policy changes that would increase the aggregate income, through extending working lives and increasing labour market participation, as well as adjust consumption levels to sustain the generational balance.

Keywords: population ageing, generational balance, National Transfer Accounts

Agnieszka Chłoń-Domińczak
Warsaw School of Economics
Email: achlon@sgh.waw.pl  

Wojciech Łątkowski
Warsaw School of Economics
Email: latkow@poczta.fm