Spanish families transfer 130 billion euros each year within their own homes to finance the consumption of children and young people who do not yet have sufficient income. This is highlighted by the report prepared by the Ageingnomics Research Center of the Mapfre Foundation and FEDEA, which analyzes income and expenses by age and gender and quantifies the real weight of family solidarity in the economy.
The study is clear, and points out that “the aggregate amount of these transfers is very important, reaching 130,000 million euros annually, of which 103,000 million come from adults in the central age group and 27,000 million from those over 55 years of age.”
The flow is evident. Adults of prime working age support much of the consumption of children and young people until they achieve economic independence.
Adults are the great breadwinners
The report explains that “basically (the transfers) go from adults to children and young people to finance the consumption of the latter until they have sufficient income to finance themselves.”
This dynamic is not minor if we take into account that the group between 30 and 54 years old also bears the highest tax burden in the system. According to the study data, while adults present a negative net balance with the public sector of about 165,000 million euros, young people register a surplus of 46,000 million and those over 55 years of age one close to 100,000 million, driven mainly by pensions.
That is, the central generation not only finances the system via taxes and contributions, but also redistributes income within the family sphere.
Those over 55 years of age have more economic and savings capacity
During the presentation of the report, the authors highlighted an idea that breaks with some clichés, those over 55 years of age are currently the group with the greatest average economic capacity and the one with the highest level of savings.
The data supports that claim. The average annual savings per person in this group reaches 4,570 euros, compared to 1,816 euros for adults aged 30 to 54 and just 232 euros among those under 30.
Furthermore, their average resources per person amount to 36,816 euros per year, above the general average.
The experts explained that this greater capacity not only responds to income, but also to the fact that they assume lower economic burdens, and the fact is that many no longer have dependent children, have finished paying for housing or share fewer family expenses than the central generation.
But there is another relevant nuance. Far from the usual perception that their income comes exclusively from public benefits, the elderly also contribute resources to the system. In addition to pensions, they have capital income, accumulated savings and, in many cases, they continue to generate income from work or financially support their families.
In fact, the report shows that those over 55 years of age not only have a positive balance with the public sector, but also participate in internal transfers within the home, contributing 27 billion euros to the economic support of children and grandchildren.
Consumption does not fall despite the lack of youth income
One of the most relevant elements of the analysis is that consumption per person remains relatively stable throughout life, even in stages in which labor income is low or non-existent.
The report itself emphasizes that “since the consumption profile is relatively flat and the generation of income, at least from work, is concentrated in the intermediate period of life, the consumption of young and old people must be largely financed with transfers that come, to different extents, from the public sector and the family.”
It is precisely there where the key role of households as an economic safety net emerges.