Do Aging European Societies Tax Their Own Reproduction?

Talk by Pieter Vanhuysse (University of Southern Denmark) as part of the project "Transforming Anxieties of Ageing in Southeastern Europe. Political, Social, and Cultural Narratives of Demographic Change", funded by VolkswagenStiftung.

In his talk, Prof. Vanhuysse will ask what the intergenerational resource transfer contributions of parents and non-parents in Europe are. Using National Transfer Accounts and National Time Transfer Accounts for twelve countries around 2010, his presentation will go beyond public transfers (net taxes) to also value two statistically much less visible transfers in the family realm: of market goods and of unpaid household labour (time). Non-parents contribute almost exclusively to public transfers. But parents additionally provide still larger private transfers: mothers mainly time, fathers mainly market goods. Estimating transfer stocks over the working life, the average parental/non-parental contribution ratio in Europe flips from 0.73 (public transfers alone) to 2.66 (all three transfers combined). Unveiling the sheer magnitude of these invisible transfer asymmetries carries multiple implications for societal and policy debates. Societies implicitly adhere to a ‘stork theory’ of child-rearing when they do not account for all resources required to produce the next generations of workers and taxpayers. Better accounting could lead to another ‘green moment,’ as it shifts perspectives on demographic renewal and fiscal sustainability. Despite below-replacement fertility levels and rising intentional childlessness, aging societies unwittingly tax rather than subsidize their own reproduction.

Pieter Vanhuysse (PhD, LSE) is a member of the European Academy. He is a Full Professor of Politics and Public Policy at the Department of Political Science and a Senior Fellow at the Danish Institute for Advanced Study, University of Southern Denmark. He works on political economy, aging democracies, welfare states, political demography, intergenerational transfers, and East Central Europe. His talk is based on the research article "Taxing reproduction: the full transfer cost of rearing children in Europe".