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. 2004 Dec 1:10969:1-15.

Who wins and who loses? Public transfer accounts for US generations born 1850 to 2090

Antoine Bommier  1 , Ronald Lee, Tim Miller, Stéphane Zuber
Affiliations

Who wins and who loses? Public transfer accounts for US generations born 1850 to 2090

Antoine Bommier et al. Popul Dev Rev. .

Abstract

Public transfer programs in industrial nations are thought to benefit the elderly through pension and health care programs at the expense of the young and future generations. However, this intergenerational picture changes if public education is also considered as a transfer program. We calculate the net present value (NPV) of benefits received minus taxes paid for US generations born 1850 to 2090. Surprisingly, all generations 1950 to 2050 are net gainers, while many current elderly are losers. Windfall gains from starting Social Security and Medicare partially offset windfall losses from starting public education, roughly consistent with the Becker-Murphy theory.

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Figures

Figure 1
Figure 1
Present value at birth of Social Security benefits and taxes
Figure 2
Figure 2
Present value of Medicare benefits and taxes
Figure 3
Figure 3
NPV at birth of expected lifetime Social Security and Medicare benefits as percent of lifetime earnings
Fig 4
Fig 4
NPV at birth of expected lifetime Social Security and Medicare as percent of lifetime earnings
Figure 5
Figure 5
Present value at birth of education benefits and taxes
Figure 6
Figure 6
NPV at birth of expected lifetime education benefits as percent of lifetime earnings
Figure 7
Figure 7
NPV at birth of expected lifetime education, Social Security, and Medicare benefits as percent of lifetime earnings
Figure 8
Figure 8
Budget balancing policy options: NPV at birth of expected lifetime education, Social Security, and Medicare benefits as percent of lifetime earnings (budget balancing options do not apply to education which is already assumed balanced)
Figure 9
Figure 9
Net present value of participating in all transfer systems by age in 2004 by budget balancing options (budget balancing options do not apply to education which is already assumed balanced)
Figure 10
Figure 10
Sensitivity tests of NPV using various discount rates
Figure A1
Figure A1
NPV at birth of expected lifetime public benefits as percent of lifetime earnings
Figure A2
Figure A2
Present value of lifetime earnings at birth
Figure A3
Figure A3
Net present value of participating in Social Security and Medicare by age in 2004
See this image and copyright information in PMC

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