Evolution of the generational distribution of income, consumption and lifecycle deficit in Poland between 2004 and 2016: Facing the EU convergence and demographic challenges

Abstract

The National Transfer Accounts approach is used to assess lifecycle deficit in Poland between the EU accession in 2004 and 2016. In this period, the overall consumption remained relatively stable relative to wages while labour income increased, mainly due to the increased economic activity at higher ages. There is a shift in the generational distribution of consumption and public transfers towards the older age groups, that reflects the changes in the age structure of the population. At the same time, the per capita age profiles of labour income, consumption, life cycle deficit and public transfers in Poland converge to the average levels observed in Europe, however, the gap remains, particularly in public transfers, including public consumption on health. With the continued population ageing it is important to maintain policies that stimulate growth of the labour income that is faster than consumption increases in order to maintain the balance between lifecycle deficit of the young and older generations and lifecycle surplus of the active generation.