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Who Wins and Who Loses? Public Transfer Accounts for US Generations Born 1850 to 2090

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  • Antoine Bommier
  • Ronald Lee
  • Timothy Miller
  • Stephane Zuber

Abstract

Public transfer programs in industrial nations have massive long term fiscal imbalances, and apparently permit the elderly to benefit through pension and health care programs at the cost of the young and future generations. However, the intergenerational picture is turned upside down when public education is included in generational accounts along with pensions and health care. We calculate the net present value (NPV) of benefits received minus taxes paid for US generations born 1850 to 2090, and find that all generations born from 1950 to 2050 are net gainers, while many of today's old people are net losers. Windfall gains for early generations when Social Security and Medicare started up partially offset windfall losses when public education was started, roughtly consistent with the Becker-Murphy theory.

Suggested Citation

  • Antoine Bommier & Ronald Lee & Timothy Miller & Stephane Zuber, 2004. "Who Wins and Who Loses? Public Transfer Accounts for US Generations Born 1850 to 2090," NBER Working Papers 10969, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:10969
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    1. Michele Boldrin & Ana Montes, 2005. "The Intergenerational State Education and Pensions," Review of Economic Studies, Oxford University Press, vol. 72(3), pages 651-664.
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    10. Theodore C. Bergstrom & John L. Hartman, 2005. "Demographics and the Political Sustainability of Pay-as-you-go Social Security," CESifo Working Paper Series 1378, CESifo Group Munich.
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    Citations

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    Cited by:

    1. 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.
    2. Ronald Lee & Andrew Mason, 2011. "Theorectical aspects of National Transfer Accounts," Chapters,in: Population Aging and the Generational Economy, chapter 2 Edward Elgar Publishing.
    3. Ronald Lee & Andrew Mason, 2011. "Lifecycles, support systems, and generational flows: patterns and change," Chapters,in: Population Aging and the Generational Economy, chapter 4 Edward Elgar Publishing.
    4. Jorge Bravo & Mauricio Holz, 2011. "The significance of inter-age economic transgers in Chile," Chapters,in: Population Aging and the Generational Economy, chapter 12 Edward Elgar Publishing.
    5. 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.
    6. Teresa Ghilarducci, 2010. "The future of retirement in aging societies," International Review of Applied Economics, Taylor & Francis Journals, vol. 24(3), pages 319-331.
    7. 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.
    8. Lee, R., 2016. "Macroeconomics, Aging, and Growth," Handbook of the Economics of Population Aging, Elsevier.
    9. 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, February.
    10. 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.
    11. Tim Miller, 2011. "The rise of the intergenerational state: aging and development," Chapters,in: Population Aging and the Generational Economy, chapter 7 Edward Elgar Publishing.
    12. 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.
    13. 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.
    14. Torben M. Andersen & Joydeep Bhattacharya, 2013. "The Intergenerational Welfare State," CESifo Working Paper Series 4359, CESifo Group Munich.
    15. Cassio M. Turra & Bernardo L Queiroz & Eduardo L. G. Rios-Neto, 2011. "Idiosyncrasies of intergenerational transfers in Brazil," Chapters,in: Population Aging and the Generational Economy, chapter 21 Edward Elgar Publishing.

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    JEL classification:

    • H0 - Public Economics - - General

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