February 2010
Welcome to the first issue of the NTA Newsletter!
The quarterly NTA newsletter serves as a communication tool for members of the National Transfer Accounts Project.
Your input is needed to keep this newsletter interesting and relevant. Please don't hesitate to email your ideas to the managing editor (Melinda Podor). We especially look forward to hearing about upcoming events, new papers, NTA in the news, and any photos you'd like to share. The newsletter will also feature a Question and Answer section. Send in your question, and see it featured in the next newsletter (anonymously if you wish).
Please note that this is an html email with images - you may need to adjust your email settings to view it in its intended form, or view it in your browser.
I hope you enjoy the first issue, and look forward to hearing your questions and ideas!
Melinda
What’s New
The project "National Transfer Accounts and intergenerational redistribution in European institutional settings"
has been approved for funding in the European Collaborative Research Projects (ECRP) competition. Funding will be provided by national funding organizations in Austria, Hungary, Spain and Sweden. Congratulations to the researchers collaborating on this project!
Upcoming Events
European NTA Workshop 2010
Rostock, Germany, February 25-26, 2010
Max Planck Institute for Demographic Research (MPIDR)
Access program
NTA Conference on Population and the Generational Economy
Honolulu, USA, June 11-12, 2010
East West Center
More about the conference
Workshop on Population Aging and the Generational Economy
Honolulu, USA, June 6-20, 2010
East West Center
More about the workshop
Recent working papers
Ronald Lee and Andrew Mason. 2010
Generational Economics in a Changing World. Presented at a meeting on the long-term consequences of the demographic transition held in Madrid, Spain in September 2009. Currently under review of a special issue of Population and Development Review.
Read abstract Access paper online (WP09-04)
Bravo, Jorge, and Mauricio Holz. 2009.
National Transfer Accounts: Concepts and some examples from Latin America and Asia.
Read summary Access paper online (WP09-02)
Lee, Ronald, and Andrew Mason. 2009.
Some macroeconomic aspects of global population aging.
Read abstract Access paper online (WP09-03)
Access all NTA working papers online
Access published NTA papers online
Update on Population Aging and the Generational Economy
We anticipate publication of the first NTA volume to be this year, but we are down to the wire. If your paper is in the copy editing process, please submit any revisions to Sandra Ward as soon as possible. The other chapters of the volume are complete or in the final stages of preparation, but please let us know if there are any data issues that remain. Thanks to all for your hard work.
Recent events summary
Latin American NTA Seminar on Population Aging, Intergenerational Transfers, and Social Protection.
NTA researchers and policymakers from Brazil, Costa Rica, Chile, Mexico, and Uruguay met in Santiago, Chile on October 20-21, 2009. The event served to discuss the use of National Transfers Accounts to inform public policy decisions. It was organized by the United Nations Economic Commission for Latin America and the Caribbean (ECLAC) and sponsored by the International Development Research Center (IDRC), United Nations Population Fund, and the United Nations Population Division.
Agenda with links to papers and presentations
We welcome our newest members
Focus on... Germany
Germany holds the 2010 European NTA Workshop in February 25-26.
the Max Planck Institute for Demographic Research, Rostock, Germany
The German team (consisting of Fanny Kluge) has a complete National Transfer Flow Account for 2003. Special emphasis is on
showing the differences for East and West Germany in 2003 (which was possible because the Federal Statistical Office still publishes the regions separately). There are some interesting differences between the two regions, especially concerning public transfer inflows. The East-German pensioners rely almost entirely on the PAYGO system and have no additional assets. The public transfer dependency for younger ages is also twice as high as their Western counterparts, due to high unemployment rates.
Fanny Kluge graduated from Humboldt-University, Berlin, in 2007 and also studied at the Copenhagen Business School. She is a PhD student at the Max Planck Institute for Demographic Research and currently focuses on estimating NTA. Her latest working paper is below.
Kluge, Fanny Annemarie. 2009. Transfer, consumption and income over the life cycle in Germany.
Abstract: This paper seeks to quantify all public and private interage monetary flows in Germany applying the National Transfer Account method. Germany's lifecycle deficit is shaped by long periods spent in education, early retirement, and low labor force participation rates among the older work force, resulting in a rather short surplus period. Germany is a picture book welfare state, over the last century the government took over more and more functions the family would once have absorbed. During the long dependent periods of childhood and old age, the main expenditures - including education for younger people and pensions and health care for older people - are publicly financed. Private consumption is low for these items. In contrast to public in-kind transfers, public cash transfers are highly skewed to the elderly. Special emphasis will be placed on differences in East/West lifecycle deficit patterns.
Access working paper (WP09-01)
Methodology Refresher
Notes on Private Transfer Methodology
The methodology for intra-household transfers on the wiki assumes that all profile information comes from a single survey and that the survey perfectly reflects the national population age distribution. However if we do not have all the necessary information in one survey, the methodology described in the wiki needs modification.
In this case, two steps are needed before the methodology can be applied. First, select the survey that has most of the necessary variables calculated in it to be the individual-level survey. It must identify the household head and provide the age of all members of the household and have as many other NTA variables calculated for individuals as possible. Often, this is the consumption survey. Second, assign control total-adjusted profile values to each individual based on age. These profiles can come from whichever survey the country team thinks provides the most accurate data. Finally, apply the intra-household transfer methodology as written on the wiki using the assigned profile values instead of survey responses.
More on Private Transfers methodology here. (Click on Private Transfer Notes at bottom of page).
Did you know that...
...if you change a variable in one area of the NTA, you may need to recalculate others? Changes in LCD or TG variables will affect TF and ABR variables and changes in TF variables will affect ABR variables.
...it's not necessary to report age profiles for net foreign public transfers (TGNF)? Only the macro control is needed in the asset-based reallocation spreadsheet. Check to make sure that the macro control for TG is equal to controls for TGNF + TGD.
...if you don't have earmarked taxes for specific public transfer inflows, all of your public sector outflows will have the shape of the overall tax profile, adjusted to different macro controls.
...public sector inflows and outflows should be domestic only? If your accounts do not report ROW transactions by program, you can take the ROW inflows or outflow amounts out of each program based on a pro-rata share of total ROW inflows or outflows.
Members' Corner & Housekeeping Items
Email your letters, notes, and announcements to appear in the next newsletter!
Please send member photos to Turro Wongkaren (turro@hawaii.edu) to update the
member directory
Paper Abstracts
Ronald Lee and Andrew Mason. 2010
Generational Economics in a Changing World.
Abstract: Hunter-gatherers evolved a life strategy of food sharing within and across generations, including transferring surplus food to children to support their long period of nutritional dependency. In intensive agriculture, the elderly became net consumers, when they were sustained in part by food transfers from their adult children. At the same time, assets became more important, providing an alternative support for the retired. These trends continued as agriculture gave way to industry. A growing public sector reinforced downward transfers with public education and health care for children. With development, transfers to the elderly became increasingly important, their fiscal effect exacerbated by aging populations. At the same time, the growth of capital and financial institutions provided new forms of asset accumulation along with private pensions. These two trends reduced the role of the family in providing for the elderly. Our evolved sociality is now expressed through welfare state redistributive programs, and intensifying public and private investment in children. But population aging and more public programs for the elderly has led to a reversal in the direction of resource flows from downward to upward. The old age dependency ratio is projected to double or triple in coming decades in the rich industrial countries, and the public costs of the elderly may increasingly compete with investments in children through the public sector budget constraint. It remains to be seen whether the elderly will opt to work until older ages, and whether the rapid growth of health care expenditures will be restrained. Access paper online
Back to working papers
Bravo, Jorge, and Mauricio Holz.
National Transfer Accounts: Concepts and some examples from Latin America and Asia.
Summary: This paper was presented at the Seminar on Family Support Networks and Population Aging, 3-4 October 2009. Familial transfers, which are of primary interest of the Seminar, are an important type of reallocation of economic resources, which usually constitute the bulk of private transfers. We examine selected empirical examples for Latin America and Asia, beginning with the case of Chile. Access paper online
Back to working papers
Lee, Ronald, and Andrew Mason. 2009.
Some macroeconomic aspects of global population aging.
Abstract: Across the demographic transition, declining mortality followed by declining fertility produces decades of rising support ratios as child dependency falls. These improving support ratios raise per capita consumption, other things equal, but eventually deteriorate as the population ages. Population aging and the forces leading to it can produce not only frightening declines in support ratios, but also very substantial increases in productivity and per capita income by raising investment in physical and human capital. Longer life, lower fertility, and population aging all raise the demand for wealth needed to provide for old age consumption. This leads to increased capital per worker even as aggregate saving rates fall. However, increased capital per worker may not occur if the increased demand for wealth is satisfied by increased familial or public pension transfers to the elderly. Thus institutions and policies matter for the consequences of population aging. The accumulation of human capital also varies across the transition. Lower fertility and mortality are associated with higher human capital investment per child, also raising labor productivity. Together, the positive changes due to human and physical capital accumulation will likely outweigh the problems of declining support ratios. We will draw on estimates and analyses from the National Transfer Accounts project to illustrate and quantify these points.
Access paper online
Back to working papers
|
Dr. Pablo Comelatto Argentina
Dr. David McCarthy, United Kingdom
Melinda Podor, Hawaii
Dr. Jorge Paz, Argentina
Dr. Rafael Rofman, Argentina
Dr. James Sefton, United Kingdom