Financing the Consumption of the Young and Old in France.

Summary A BETTER UNDERSTANDING of the resource allocation across ages is fundamental to put in place welfare reforms in the context of population ageing. In times of major demographic change, the redistribution of resources between age groups and the funding of the economically inactive aged remains a recurring topic of public debate and a major public policy concern in OECD countries. Governments search for a policy mix that will improve the quality of life of the elderly, while at the same time investing in the future of the young and reducing the fiscal burden on the working population. Life expectancy and education requirements are increasing while budget constraints are tightening. This potentially creates tension in the allocation of resources between age groups (Preston 1984. Lee and Mason 2011a). Some authors have shown the negative impact that a growing share of elderly could have on education spending for the young (Poterba 1997, 1998. Harris et al. 2001). The compact between the generations could suffer as a result (United Nations 2013a. Chen et al. 2018).