Welfare states as lifecycle redistribution machines: Decomposing the roles of age and socio-economic status shows that European tax-and-benefit systems primarily redistribute across age groups

Social scientists identify two core functions of modern welfare states as redistribution across (a) socio-economic status groups (Robin Hood) and (b) ‘the lifecycle’ (the piggy bank). But what is the relative importance these functions? The answer has been elusive, bank metaphorical. intra-personal time-travel resources it implies based on non- quid-pro-quo transfers. In practice, ‘lifecycle redistribution’ must operate through inter-age-group resource reallocation in cross-section. Since at any time different birth cohorts live together, ‘resource-productive’ working-aged people are taxed to finance consumption ‘resource-dependent’ younger older people. a novel decomposition analysis, we study joint distribution status, age, respectively all cash in-kind transfers (‘benefits’), financing contributions (‘taxes’), (c) resulting ‘net benefits,’ sample over 400,000 Europeans from 22 EU countries. European states, often maligned ineffective Robin Hood vehicles riddled with Matthew effects, better characterized inter-age machines performing more important second task rather well: lifecycle smoothing. policies serve multiple goals Europe, but empirically they neither primarily nor solely responsible for poverty relief inequality reduction.