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
SUMMARY

This paper studies the nature of the relationship and the impact of the 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 ... (see full summary)

 
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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.

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