Who Benefits from Public Transfers?
Figure 6.8
227
Children: Public Transfers as a Percentage of Total Consumption
United States Europe Japan other Asia Brazil Chile Uruguay Costa Rica 0
10
20
30
40
50
60
percentage of total consumption Source: National Transfer Accounts Project (www.ntaccounts.org).
public expenditures finance a larger fraction of the consumption of the elderly.8 Figure 6.9 shows that education is a substantial part of the value of the consumption of children. Here, too, there are significant variations across countries. The cost of education (public and private) as a percentage of total consumption of children is highest in Japan (37 percent), followed by Europe (about a third), the United States (a bit over a fourth), and other Asia, with the four LAC countries trailing behind all these international comparators. Figure 6.10 shows that most of the cost of education is publicly financed in the richer countries. Other Asia has the lowest public financing of education. Within the four LAC countries, Chile and Costa Rica have relatively higher levels, while Brazil and Uruguay have the lowest levels. Figure 6.11 shows familial private transfers as a proportion of the consumption of the elderly. It is usually thought that elderly parents are helped by “upward transfers” (private transfers from their children). The NTA data show that this is only observed in Asia. In Europe, the United States, and LAC the pattern observed is of net “downward transfers”— from the elderly to their children and grandchildren. These downward transfers are particularly large in Brazil and Uruguay. In these two countries it seems that the elderly receive significant transfers from public pensions and pass some of these funds to their children and grandchildren.