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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.

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  • 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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    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. Luciano Fanti & Luca Gori, 2010. "Public Education, Fertility Incentives, Neoclassical Economic Growth And Welfare," Bulletin of Economic Research, Wiley Blackwell, vol. 62(1), pages 59-77, January.
    4. Bishnu, Monisankar & Garg, Shresth & Garg, Tishara & Ray, Tridip, 2021. "Optimal intergenerational transfers: Public education and pensions," Journal of Public Economics, Elsevier, vol. 198(C).
    5. Teresa Ghilarducci, 2010. "The future of retirement in aging societies," International Review of Applied Economics, Taylor & Francis Journals, vol. 24(3), pages 319-331.
    6. 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.
    7. 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.
    8. 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.
    9. Young Jun Chun & Ji Eun Song, 2018. "Retrospective Generational Accounts for Korea," Korean Economic Review, Korean Economic Association, vol. 34, pages 157-185.
    10. 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.
    11. Gianko Michailidis & Concepció Patxot, 2018. "Political viability of intergenerational transfers. An empirical application," UB School of Economics Working Papers 2018/370, University of Barcelona School of Economics.
    12. Torben M. Andersen & Joydeep Bhattacharya, 2013. "The Intergenerational Welfare State," CESifo Working Paper Series 4359, CESifo.
    13. 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.
    14. Andrew Mason & Sang-Hyop Lee, 2012. "Population, wealth, and economicgrowth in Asia and the Pacific," Chapters, in: Donghyun Park & Sang-Hyop Lee & Andrew Mason (ed.), Aging, Economic Growth, and Old-Age Security in Asia, chapter 2, pages 32-82, Edward Elgar Publishing.
    15. 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.
    16. 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.
    17. Miguel Sánchez-Romero & Gemma Abío & Montserrat Botey & Alexia Prskawetz & Joze Sambt & Meritxell Solé Juvés & Guadalupe Souto & Lili Vargha & Concepció Patxot, 2019. "Welfare state winners and losers in ageing societies," Vienna Yearbook of Population Research, Vienna Institute of Demography (VID) of the Austrian Academy of Sciences in Vienna, vol. 17(1), pages 009-036.
    18. 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.
    19. 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.
    20. 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.

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