Demographic Change and Federal Systems: Some Preliminary Results for Germany
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Authors
Seitz, Helmut
Freigang, Dirk
Kempkes, Gerhard
Date
2005
Type
working paper
Language
en
Keyword
Alternative Title
Abstract
The paper examines the impact of demographic change on federal, state and local government expenditures in Germany. Public spending is broken down into almost 30 categories (functions) and simple estimates of age cost profiles are derived. Using population forecasts and assuming time-invariant age cost profiles we estimate the effects of the ageing of the Germany society on the level and structure of expenditures at the three layers of governments. Our results show that subnational governments - state and local governments - can expect demographic savings whereas the federal government will live to see a worsening of its fiscal stance. Thus one should expect that significant vertical expenditure imbalances will arise that - if institutional settings are left unchanged - will ask for an adjustment of revenue distribution within the federation.
Description
© 2005 IIGR, Queen’s University
Citation
Publisher
Queen's University Institute of Intergovernmental Relations