What do we give to the next generation? Do we make large transfers of wealth and human capital to our children, or do we saddle them with debt and obligate them to support us in our old age? In this talk, Lee takes exploratory first steps toward answering this question at the national level. Standard Generational Accounts (GA) calculates the net present value of public sector taxes and benefits. Full Generational Accounts (FGA) adds to this the Present Value of expected private transfers received over a lifetime, including parental costs of childrearing, bequests, and inter vivos transfers. FGA counts the private transfers received, but does not net out those made to others, because the latter are discretionary, unlike taxes. Using data from National Transfer Accounts (NTA) Lee makes a first attempt to calculate FGA for the US, where public transfers to children and the elderly are important, and for Taiwan, where the family plays a larger role in both. He decomposes the FGA into public and private components, and into human capital investments (health, education), bequests, and other consumption. The accounts refer to averages for ages and generations, with no disaggregation by socioeconomic status. They also do not reflect the intergenerational transfer of knowledge, technology, institutions, or the natural world. Nonetheless Lee believes that this approach may yield new and useful insights.

 

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