The Effect of Demographic Changes on Government Social Expenditure and Life Cycle Expenditure in Iran Economy

This paper investigates the impact of demographic changes on government social expenditure on one hand, and private life cycle expenditure components inequalities, on the other.The main questions here are to consider what affect government expenditure as well as private life cycle expenditureswhich can be affected by demographic factors. Therefore, to reply these questions, demographic changes as a composite index has been identified then, based on theoretical debate, the main demographic-related component of government expenditure (health and care expenditure) has been regressed on mentioned index and other explanatory variables. Result shows that over time and among age groups, large and increasing share of health and care budget devote to older generations. Also, analyzing the other question it has been revealed that life cycle components have hump-shape against age groups and while some of them, health and long term care for instance, are related to demographic factors, with increasing mean and dispersion between age groupsin long time, the others such as energy consumption are independent from demographic changes.