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An Analysis of Equity in Redistribution to the Retired and Children over Recent Decades in the OECD and UK

Published online by Cambridge University Press:  05 September 2012

JONATHAN BRADSHAW  and
JOHN HOLMES
JONATHAN BRADSHAW
Affiliation:
Professor of Social Policy, Department of Social Policy and Social Work, University of York, Heslington, York, YO10 5DD email: [email protected]
JOHN HOLMES
Affiliation:
Research Fellow, Section of Public Health, ScHARR, University of Sheffield, Regents Court, 30 Regent Street, Sheffield, S1 4DA email: [email protected]
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Abstract

In The Pinch, David Willetts (2010: xv) attracted attention by asking whether ‘the boomers have been guilty of a monumental failure to protect the interest of future generations’. This was just the latest contribution to a long running concern of social policy analysts about horizontal equity and generational fairness. Using OECD data from 1980–2007, in the first part of this paper we show that there is no evidence that social expenditure has been shifting in favour of the retired at the expense of children, except perhaps recently in some Nordic countries. For the UK, we have created a time-series using the published articles since 1977 and the micro data sets since 1994/5 from the annual Office for National Statistics analyses of the Effect of Taxes and Benefits on Household Incomes and used it to analyse trends in the redistributive impact of cash benefits, direct and indirect taxes and services on the retired and households with children and across the income distribution. The analysis shows how the relative support for the retired versus children has changed over time, which elements have contributed to the changes and for which part of the income distribution. There has been a small shift in final income in favour of the retired but it was not the result of changes in taxes, benefits or services in kind but rather a change in the original income distribution in favour of the retired.

Type
Articles
Information
Journal of Social Policy , Volume 42 , Issue 1 , January 2013 , pp. 39 - 56
Copyright
Copyright © Cambridge University Press 2012

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