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Who wins and who loses? Public transfer accounts for US generations born 1850 to 2090

Author

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  • Antoine Bommier

    () (GREMAQ - Groupe de recherche en économie mathématique et quantitative - CNRS - Centre National de la Recherche Scientifique - EHESS - École des hautes études en sciences sociales - INRA - Institut National de la Recherche Agronomique - UT1 - Université Toulouse 1 Capitole)

  • Ronald Lee

    (GREMAQ - Groupe de recherche en économie mathématique et quantitative - CNRS - Centre National de la Recherche Scientifique - EHESS - École des hautes études en sciences sociales - INRA - Institut National de la Recherche Agronomique - UT1 - Université Toulouse 1 Capitole)

  • Timothy Miller

    (Population Division (CELADE), Chile)

  • Stéphane Zuber

    () (Center for Operations Research and Econometrics CORE - UCL - Université Catholique de Louvain, Department of Demography, GREMAQ - Groupe de recherche en économie mathématique et quantitative - CNRS - Centre National de la Recherche Scientifique - EHESS - École des hautes études en sciences sociales - INRA - Institut National de la Recherche Agronomique - UT1 - Université Toulouse 1 Capitole)

Abstract

Public transfer programs in industrial nations are thought to benefit the elderly through pension and health care programs at the expense of the young and future generations. However, this intergenerational picture changes if public education is also considered as a transfer program. We calculate the net present value (NPV) of benefits received minus taxes paid for US generations born 1850 to 2090. Surprisingly, all generations 1950 to 2050 are net gainers, while many current elderly are losers. Windfall gains from starting Social Security and Medicare partially offset windfall losses from starting public education, roughly consistent with the Becker-Murphy theory.

Suggested Citation

  • Antoine Bommier & Ronald Lee & Timothy Miller & Stéphane Zuber, 2004. "Who wins and who loses? Public transfer accounts for US generations born 1850 to 2090," Post-Print hal-01953279, HAL.
  • Handle: RePEc:hal:journl:hal-01953279
    Note: View the original document on HAL open archive server: https://hal.archives-ouvertes.fr/hal-01953279
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    References listed on IDEAS

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    Cited by:

    1. Ronald Lee & Andrew Mason, 2011. "Lifecycles, support systems, and generational flows: patterns and change," Chapters, in: Ronald Lee & Andrew Mason (ed.),Population Aging and the Generational Economy, chapter 4, Edward Elgar Publishing.
    2. Jorge Bravo & Mauricio Holz, 2011. "The significance of inter-age economic transgers in Chile," Chapters, in: Ronald Lee & Andrew Mason (ed.),Population Aging and the Generational Economy, chapter 12, Edward Elgar Publishing.
    3. Paolo Pertile & Veronica Polin & Pietro Rizza & Marzia Romanelli, 2015. "The fiscal disadvantage of young Italians: a new view on consolidation and fairness," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 13(1), pages 27-51, March.
    4. Lee, R., 2016. "Macroeconomics, Aging, and Growth," Handbook of the Economics of Population Aging, in: Piggott, John & Woodland, Alan (ed.),Handbook of the Economics of Population Aging, edition 1, volume 1, chapter 0, pages 59-118, Elsevier.
    5. Timothy Smeeding & Irwin Garfinkel & Lee Rainwater, 2005. "Welfare State Expenditures and the Redistribution of Well-Being: Children, Elders, and Others in Comparative Perspective," LIS Working papers 387, LIS Cross-National Data Center in Luxembourg.
    6. Paolo Pertile & Veronica Polin & Pietro Rizza & Marzia Romanelli, 2012. "Public finance consolidation and fairness across living generations: the case of Italy," Working Papers 04/2012, University of Verona, Department of Economics.
    7. Tim Miller, 2011. "The rise of the intergenerational state: aging and development," Chapters, in: Ronald Lee & Andrew Mason (ed.),Population Aging and the Generational Economy, chapter 7, Edward Elgar Publishing.
    8. Zamac, Jovan, 2007. "Pension design when fertility fluctuates: The role of education and capital mobility," Journal of Public Economics, Elsevier, vol. 91(3-4), pages 619-639, April.
    9. Gianko Michailidis & Concepció Patxot, 2018. "Political viability of intergenerational transfers. An empirical application," UB Economics Working Papers 2018/370, Universitat de Barcelona, Facultat d'Economia i Empresa, UB Economics.
    10. Ronald Lee & Andrew Mason, 2011. "Theorectical aspects of National Transfer Accounts," Chapters, in: Ronald Lee & Andrew Mason (ed.),Population Aging and the Generational Economy, chapter 2, Edward Elgar Publishing.
    11. Torben M. Andersen & Joydeep Bhattacharya, 2013. "The Intergenerational Welfare State," CESifo Working Paper Series 4359, CESifo.
    12. Teresa Ghilarducci, 2010. "The future of retirement in aging societies," International Review of Applied Economics, Taylor & Francis Journals, vol. 24(3), pages 319-331.
    13. Cassio M. Turra & Bernardo L Queiroz & Eduardo L. G. Rios-Neto, 2011. "Idiosyncrasies of intergenerational transfers in Brazil," Chapters, in: Ronald Lee & Andrew Mason (ed.),Population Aging and the Generational Economy, chapter 21, Edward Elgar Publishing.
    14. Hal Caswell & Fanny Annemarie Kluge, 2015. "Demography and the statistics of lifetime economic transfers under individual stochasticity," Demographic Research, Max Planck Institute for Demographic Research, Rostock, Germany, vol. 32(19), pages 563-588.
    15. Ronald Lee, 2012. "Macroeconomic Implications of Demographic Changes: A Global Perspective," IMES Discussion Paper Series 12-E-11, Institute for Monetary and Economic Studies, Bank of Japan.

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    JEL classification:

    • H0 - Public Economics - - General

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