Constructing a base-line Constructing a base-line NTA for Chile: preliminary NTA for Chile: preliminary
findingsfindingsJorge BravoJorge Bravo
with the assistance of Mauricio Holzwith the assistance of Mauricio HolzECLAC/CELADE-Population DivisionECLAC/CELADE-Population Division
Presented at the 3Presented at the 3rdrd Meeting of the Working Meeting of the Working Group on Macroeconomic Aspects of Group on Macroeconomic Aspects of Intergenerational Transfers, Honolulu, Intergenerational Transfers, Honolulu,
Hawaii, January 20-22, 2006Hawaii, January 20-22, 2006
AcknowledgementsAcknowledgements
Team at ECLAC/CELADE, NTA project Team at ECLAC/CELADE, NTA project groupgroup
Government of Chile: Budget Office, Government of Chile: Budget Office, Ministry of Finance; National Ministry of Finance; National Statistical Institute, Planning MinistryStatistical Institute, Planning Ministry
Funding from the government of Funding from the government of France, NIH projectFrance, NIH project
A base-line NTA for Chile: A base-line NTA for Chile: results to dateresults to date
1.1. Private and public consumptionPrivate and public consumption
2.2. Labor earnings and cross-over ages: Labor earnings and cross-over ages: a closer looka closer look
3.3. Public spending: in-kind and cash Public spending: in-kind and cash transferstransfers
4.4. TaxesTaxes
a)a) Estimated Estimated privateprivate consumption with data consumption with data from Budget and Expenditure Survey from Budget and Expenditure Survey (BES) 1996/97, imputing all allocable (BES) 1996/97, imputing all allocable items (food, alcohol and tobacco, items (food, alcohol and tobacco, clothing, education), and applied clothing, education), and applied standard weights to the reststandard weights to the rest
b)b) PublicPublic consumption was estimated by consumption was estimated by matching social expenditure items with matching social expenditure items with program-specific age profiles identified in program-specific age profiles identified in the Socioeconomic Characterization the Socioeconomic Characterization Survey (CASEN) of 2000Survey (CASEN) of 2000
1. Private and public consumption1. Private and public consumption
Chile: per-capita Consumption, 2004
0
1
2
3
0 5 10 15 20 25 30 35 40 45 50 55 60 65 70 75 80 85 90
AgeSource: Bravo and Holz (2005), based on BES 1996/97, CASEN 2000 and Public Budget Office, 2004.
2004
mill
ion
peso
s
total
private
public
Public consumptionPublic consumption
Chile : per capita public consumption 2004
0100200
300400500600
700800900
0 5 10 15 20 25 30 35 40 45 50 55 60 65 70 75 80 85 90 95
AgeSource: Bravo and Holz (2005), based on official data (Public Budget Office, 2004; BES, 1996/97)
Thou
sand
pes
os
OtherHealthEducationTraining
c) Labor income was obtained from c) Labor income was obtained from same source used for private same source used for private consumption, i.e., the Budget and consumption, i.e., the Budget and Expenditure Survey (BES). Defined as Expenditure Survey (BES). Defined as main and secondary occupation main and secondary occupation earnings, including allowances and earnings, including allowances and earnings of independent workers earnings of independent workers (formal and informal)(formal and informal)
2. Labor earnings2. Labor earnings
Chile : Per-capita Labor earnings and Consumption, 2004
0
1
2
3
4
5
0 5 10 15 20 25 30 35 40 45 50 55 60 65 70 75 80 85 90
AgeSource: Bravo and Holz (2005), based on data of BES, 1996/97. Public Budget Office, 2004
2004
Mill
ion
Pes
os
Labor earnings
Consumption
Labor earnings: a closer lookLabor earnings: a closer look
Chile: Wages, Labor force participation and Unemployment, 2000
0
100
200
300
400
500
600
700
0 5 10 15 20 25 30 35 40 45 50 55 60 65 70 75 80 85 90 95Age
Source: Socioeconomic Characterization Survey (Casen 2000).
YL-
pc, t
hous
and
peso
s
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
LF P
art,
Un
empl
o
Ylp
Labor Force
Rate of Unemp.
Labor earnings: a closer lookLabor earnings: a closer look
Chile: Wages , Labor force participation and Unemployment, 1990
0
20
40
60
80
100
120
140
160
180
0 5 10 15 20 25 30 35 40 45 50 55 60 65 70 75 80 85 90 95
AgeSource: Socioeconomic Characterization Survey ( CASEN 2000)
YL
-pc,
th
ou
san
d P
eso
s
0%
10%
20%
30%
40%
50%
60%
70%
80%
LF
par
tici
pat
ion
, Un
emp
lo
Yl-pcLabor Force Participation Unemployment.
Labor earnings: a closer lookLabor earnings: a closer look
Labor force participation rates, 2000
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
0 5 10 15 20 25 30 35 40 45 50 55 60 65 70 75 80 85 90
Chile
Uruguay
Brasil
Age
Source: CASEN Survey (2000), CELADE (1999) estimates
Labor earnings: a closer lookLabor earnings: a closer look
Labor force participation rates, 1990
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
0 5 10 15 20 25 30 35 40 45 50 55 60 65 70 75 80 85 90
AgeSource: CASEN Survey (1990), CELADE (1999) estimates
BrasilUruguay
Chile
3. Public spending/transfers3. Public spending/transfers
Chile: Aggregate Public Transfers, 2004
0
50,000
100,000
150,000
200,000
250,000
0 5 10 15 20 25 30 35 40 45 50 55 60 65 70 75 80 85 90 95
Age
Source: Bravo and Holz (2005), based on data from the Public Budget Office, 2004, and CASEN, 2000
Bill
ion
pes
os
OtherPensionsHealthEmplymentEducation
Public transfersPublic transfers
Chile: Per-capita Public Transfers, 2004
0
1
2
3
4
5
0 5 10 15 20 25 30 35 40 45 50 55 60 65 70 75 80 85 90 95
Age
Source: Bravo and Holz (2005), based on data from the Public Budget Office, 2004, and CASEN, 2000
Mill
ion
pes
os
OtherPensionsHealthEmploymentEducation
Public transfersPublic transfers
Chile: Aggregate In Kind Transfers, 2004
0
50
100
150
200
250
0 5 10 15 20 25 30 35 40 45 50 55 60 65 70 75 80 85 90 95
age
Bill
ion
Pes
os
OtherHealth
EducationTraining
Source: Bravo and Holz (2005), based on official data (Public Budget Office, 2004; BES, 1996/97)
Public transfersPublic transfers
Chile : Aggregate Cash Transfers, 2004
0
20
40
60
80
100
120
140
160
0 5 10 15 20 25 30 35 40 45 50 55 60 65 70 75 80 85 90 95
age
Bill
ion
Pes
os Pensions
Subsidies
Source: Bravo and Holz (2005), based on official data (Public Budget Office, 2004; BES, 1996/97)
4. Taxes4. Taxes
Indirect taxes: value-added, excise, Indirect taxes: value-added, excise, trade tariffs & others. trade tariffs & others. 75% of 75% of revenue, 53% is VArevenue, 53% is VA
Direct taxes: First category (on Direct taxes: First category (on profits, paid by firms), second profits, paid by firms), second category (payroll); global (all category (payroll); global (all income); additional (levied on non-income); additional (levied on non-residents withdrawals and residents withdrawals and remittances). remittances). 25% of revenue25% of revenue
TaxesTaxes
Chile: Taxes by major category, 2004
0
100
200
300
400
500
600
700
0 5 10 15 20 25 30 35 40 45 50 55 60 65 70 75 80 85 90
ageSource: Bravo and Holz (2005), based on data from SII, 2004 and BES, 1996/97
0
0.5
1
1.5
2Income TaxesValue-AddedExcise Taxes
A base-line NTA for Chile: plan for A base-line NTA for Chile: plan for 20062006
Finalize base-year estimates: adjustment Finalize base-year estimates: adjustment to NIPA totals, check consistency of to NIPA totals, check consistency of income profile with other statistical income profile with other statistical sources & compare with other countriessources & compare with other countries
Implement measurements of lifecycle Implement measurements of lifecycle deficit and public transfers for at least one deficit and public transfers for at least one more year and estimates for 1986-2005more year and estimates for 1986-2005
Start investigation of private transfers and Start investigation of private transfers and asset reallocationsasset reallocations
Develop models for analysis and projection Develop models for analysis and projection of pension system variables, health and of pension system variables, health and other sectorsother sectors