Handbooks of Research on Public Policy series
People of different ages are linked through a complex network of relations, which play a central role in the working of our economy. These links are essential to realizing generational equity, investing in the human capital of our children and increasing economic security for the elderly. When the age distribution of the population changes, these links are stressed or relaxed, with consequences not only for the individuals concerned but also for the larger society and macroeconomy. Yet our economic accounting systems are not designed to measure or reflect these features of the economy. They contain little information about age or generation and none about these links and networks. National Transfer Accounts, or NTA, fill this gap by constructing accounts by age and generation, including both public and private or familial transfers. NTA describe how economic behavior varies with age and how changing population age distributions affect many aspects of the macroeconomy. They are relevant for understanding the economic consequences of population aging, and also for understanding the economic consequences of the demographic transition more generally. The human lifecycle begins with a long period of full or partial economic dependency, while children grow, mature, develop and learn. In modern times at least, it also ends with a long period of full or partial dependency in which older people consume more than their labor earnings.
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