National Transfer Accounts for Colombia

Abstract

This paper develops for the first time the National Transfers Accounts for Colombia. It estimates the age profiles for all income and expenses in the economy flowing from the government to households and vice versa, as well as flows within and across households. The methodology allows us to describe each age group’s production and consumption levels, their savings capacity, and how the different age groups support each other. This document shows that the lifecycle deficit is influenced by low-income which is driven in large part by the prevalence of informality. This hinders the much-needed increase in savings required to exploit the demographic dividend. It also concludes that most public transfers are devoted to the eldest rather than the youngest, but still the former rely on family support rather than public transfers. In this sense, the paper sheds light on upcoming policy debates necessary to guarantee sustainability and self-sufficiency in an aging economy.

Keywords: National Transfer Accounts, Age profile, consumption, intergenerational transfers

JEL Classification: J1, D13