Evolution of economic transfers between age groups before the crisis in Spain (2000-2008): who were the losers and winners from the pre-crisis “euphoria”?

There is a general perception that before the crisis there was a waste of money by the government and the families in Spain. It is important, then, to analyze if this misspending was made equally among age groups and to what extent it was due to the government or to families. This will have very different implications on the restructuration of the transfers system, which seems to be one of the main current concerns of governments. We propose here to analyze the evolution of lifecycle deficit and their related age reallocations profiles (transfers and asset-based) from 2000 to 2008 for Spain using National Transfers Accounts methodology. The aggregates show that the lifecycle deficit increased a 52%, meaning that consumption increased more rapidly than labor income. This implies that the necessity to finance consumption through age reallocations increased highly in few years. This tendency has been accompanied by an increase of the public share in the total consumption of the economy, growing from 25% in 2000 to 28% in 2008. This work aims to shed some light on how these changes have occurred by age, showing which age groups have benefit more or can be more affected by changes in the transfer system due to the crisis.