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Our Publications


Full generational accounts: what do we give to the next generation?

Lee, Ronald D, David McCarthy, James Sefton and Jose Sambt, 2017, Population and Development Review, 43: 695-720

To get an accurate picture of intergenerational transfers and intergenerational equity, one needs to look at both public and private transfers. The relative importance of public and private transfers to children and the elderly can vary greatly from country to country.  We develop Full Generational Accounts, and estimate these for the US and Taiwan.  We show that lifetime private transfers received are equal to public ones in the US, and are half again as large in Taiwan.  Public transfer programs are unsustainable in both the US and Taiwan in light of the pension and health care costs of population aging, and quite large adjustments to programs are necessary to achieve balance. For the US, private transfers are close to long-term balance and will actually benefit slightly from population aging, because the elderly make net private transfers to the young. Population aging permits either each newborn to receive larger transfers or the elderly to make smaller transfers, or both. In Taiwan, by contrast, the elderly receive substantial net transfers from their children, and population aging will affect the private transfer system in ways similar to the public one.  Our basic results suggest that despite population aging, growing welfare-state transfers to the elderly, early retirement, increased reliance on annuitized PAYG public pensions, and other developments in the US, younger generations still receive a very large lifetime transfer from preceding generations. In both countries, the gross transfers received exceed the present value of lifetime labor income: 123 percent in US, 158 percent in Taiwan. Of these gross transfers, 10 percent are for education in the US, coming mostly through the public sector, and 12 percent in Taiwan, coming mostly through the family.


Generational Wealth Accounts: did public and private inter-generational transfers offset each other over the financial crisis?

David McCarthy, James Sefton, Ron Lee and Jose Sambt, 2022, Economic Journal, forthcoming

We develop Generational Wealth Accounts (GWA): the first set of balance sheets, broken down by generations, to include all human capital; tangible wealth; financial wealth, and transfer wealth, and the uses to which these resources are put. We then use them to measure the size, nature (public or private; capital or current) and direction of inter-generational transfers and assess the sustainability of public and private consumption plans.  We confirm that the public sector in the UK faces serious fiscal challenges but show that the private sector is close to balance.  Although public sector finances worsened significantly over the crisis, the private sector balance improved and capital transfers to the young increased, more than fully offsetting this deterioration.  We find that increases in house prices redistributed resources away from the young and towards the old but had little effect on overall sustainability. 

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