Intergenerational Indicators
Working group on Intergenerational indicators: statistics, graphics, and other IG measures
We talk about GDP and other concepts of national accounts (NAs) as if they have always been around. In fact, the measurement of economic activities by the gross domestic product and its relatives are only about 80 years old; the regular application of the entire system of NAs came even later. These developments were induced by the Great Depression and the daily needs of the subsequent Keynesian revolution.
We witness similar theoretical activities these days, this time as a response to tectonic demographic changes, the first and the second demographic transitions around the globe. All of a sudden age composition and the way discrepancies between the consumption path and the labor income path are smoothed out have become an issue in fields such as savings, growth, public finance, investments in human capital, voting behavior and amendments to constitutions. The words “generational” and “intergenerational” have spread swiftly in literature in economics, political science and even sociology. National accounts have been given an age component: national income does not flow among institutions such as households, enterprises and government any longer but rather among overlapping cohorts.
New indicators such as net flows, life-cycle wealth, implicit pension debt, generational imbalance, sustainability gap, consumption deficit, contribution wealth and the like have been developed and calculated by various research centers for numerous countries. The short-term aim of the working group is to take stock and contribute to the debate. The long-term ambition is to offer standardized and well-defined sets of indicators to authorities such as national bureaus of statistics as well as international bodies such as Eurostat or the statistical services of the United Nations.
The workshop focuses on indicators, that is, tools condensing information of a distribution or a table in a compact way that these distributions or tables can be more easily compared with each other or tracked over time. These indicators, if intergenerational, characterize cohorts and measure, just to give some examples, redistribution across cohorts, sustainability of resource reallocation profiles, sustainability of current consumption or growth paths, the household/public or private/public mix of resource reallocations, fairness of current distribution profiles, expected future savings behavior, expected future growth, etc. The emphasis, this time, is not on redistribution, sustainability, fairness and projections but the tools that are applied in such measurements. Alternative indicators are compared, methodological issues, such as “stocks from flows”, the “optimal discount rate” or intergenerational questions of tax and transfer incidence are raised.
A new development of such measurement workshops is graphic representation of statistical indicators. Submissions of this type are also warmly welcome in this working group.
1st Meeting
Tuesday, June 8, 3.00-4.15 Program
1. Issues: Potential future research
- Issues we may want to analyze with the help of our indicators:
- growth, sustainability
- redistribution, fairness
- A framework for the indicators:
- taxonomy, common conceptual framework
- notation
- data: requirements and availability
- applicability of the NTA database
- Special issues of methodology:
- conceptual problems regarding implicit pension debt (definitions; applicability in sustainability analysis)
- application of cross-section age-profiles in estimating longitudinal profiles under non-steady state conditions
- the borderline between explicit and implicit debt/wealth: housing
- Complete strategies to describe in the most effective and efficient way societies in which age (birth year of a cohort, age-composition of a society) matters
2. A(n incomplete) taxonomy of intergenerational indicators (Robert) Mendeleev table
3. Two new indicators: the benefit generosity ratios and the intergenerational tax rate (Tim) BGR and ITR
4. Lifecycle-adjusted population dependency ratio: an NTA-application sheds new light on an old issue (Ian) adjusted PDR
2nd meeting
Thursday, June 10, 12.00-1.15:
Program: Strategies to describe the generational society:
1. NTA Wallcharts as attempts to comprehensive description (Mauricio) LAC wallchart Global wallchart
2. Principles of selecting indicators (Turro) indicator selection
3. Criteria for age structure measures (Andy) criteria
3rd meeting
Tuesday, June 15, 9.00-10.15:
Program: Special issues of methodology
Construction of pseudo longitudinal age profiles from cross-sectional NTA estimates (Ron) pseudo longitudinal age profiles
4th meeting
Wednesday, June 16, 9.00-10.15:
Program: Special issues of methodology
Implicit pension debt (David) IPD
A comment on IPD (Ron) Comment