@techreport{Bonin2001Deficit,
abstract = {According to the 2001 Spanish budgetary previsions, the government deficit is about to
disappear. We analyse this matter within a generational accounting framework. Accounting for
the recent expansive phase of the economic cycle, we find that current fiscal policy is also
intertemporally balanced provided that the favourable present employment situation lasts.
However, public finances remain under the pressure of the demographic cycle. Therefore, to
achieve fiscal sustainability, the surpluses predicted for the next decades need to be
accumulated, in order to finance deficits appearing during the baby-boomers? retirement.
The improvement of employment has played an important role in this situation. We
extend the standard generational accounting methodology incorporating tax and transfer age
profiles by employment status. This permits us to analyse the possible intertemporal impact of
several future employment developments. In particular, we assess the fiscal effects of an
expected future increase in female labour force participation. We show that this trend does not
necessarily improve the intertemporal government budget, as social insurance in Spain is not
actuarially fair. Finally, we also assess the impact of a decline in unemployment to the natural
rate of unemployment.},
author = {Holger Bonin and Gemma Abio and Eduardo Berenguer and Joan Gil and Concepci\'{o} Patxot},
copyright = {http://www.econstor.eu/dspace/Nutzungsbedingungen},
keywords = {H55; E62; 330; Generational accounting; Spain; fiscal policy; labour market trends; Intergenerative Belastungsrechnung; Haushaltsdefizit; Finanzpolitik; Besch\"{a}ftigung; Theorie; Spanien},
language = {eng},
number = {306},
title = {Is the Deficit under Control?},
type = {IZA Discussion paper series},
url = {http://hdl.handle.net/10419/21161},
year = {2001}
}
