An Analysis of the Relationship between Life Expectancy at Birth and the Total Public Revenues in Romania, during 1995-2013

• Author: Alina Cristina Nuta, Florian Marcel Nuta
• Pages: 384-387

European Integration - Realities and Perspectives. Proceedings 2015

384

An Analysis of the Relationship between Life Expectancy at Birth and the

Total Public Revenues in Romania, during 1995-2013

Alina Cristina Nuta1, Florian Marcel Nuta2

Abstract: This paper studies the nature of the relationship and the impact of th e demographic phenomena (by

life expectancy at birth indicator) on indicators of public finance (through analysis of total government

revenue). In this respect, the analysis took into account the evolution of these indicators in Romania in the

period 1995-2013 and the conclusions of the empirical analysis revealed positive link between those

indicators.

Keywords: ageing; public revenues; life expectancy

JEL Classification: J11; E62; H53

1. Introduction

The phenomenon of the population aging has become one of the most important factors that affect the

potential for developing of countries in many ways, generating the need for policy makers to adapt to

changing demographics conditions. In this context, many studies examine the major impact on public

finances (Auerbach, 2008, Bilan, 2014; Fehr, 2012; Jukka, et all., 2014; Torben, 2012; Zugravu,

2013).

Significant from this perspective are the costs revealed by age-related spending, but we need to

remember that the population structure of a country can have repercussions even on the level of public

revenues. In this regard, in this paper we analyzed how evolved the total public income in relation

with life expectancy at birth, noting that in Romania, during the analyzed period, government revenues

increased as a result of the influence generated by longevity.

This result can be explained by the fact that longevity determines an extension of time in which people

contribute to public budgets. Also, we can admit that increase government revenue is determined

precisely by the need to cover expenses related to age.

However, we must take into account that future developments will not resemble with everyday reality

and the pressure on public finances will be extremely intense. Analysis on the sustainability of public

1Senior Lecturer, PhD, ―Danubius‖ University of Galati, Romania, Address: 3 Galati Boulevard, 800654 Galati, Romania,

Tel.: +40.372.361.102, fax: +40.372.361.290, E-mail: alinanuta@univ-danubius.ro.

2 Senior Lecturer, PhD, PhD, ―Danubius‖ University of Galati, Romania, Address: 3 Galati Boulevard, 800654 Galati,

Romania, Tel.: +40.372.361.102, fax: +40.372.361.290, Corresponding author: floriann@univ-danubius.ro.