N ational T ransfer A ccounts National Transfer Accounts: An Overview Andrew Mason East-West Center University of Hawaii at Manoa

N ational T ransfer A ccounts Rationale ► Countries are experiencing dramatic changes in age structure ► Economic effects are important  Macroeconomic performance  Poverty and social welfare  Sustainability of public programs ► Research and the design of effective policy hampered by lack of appropriate data.

N ational T ransfer A ccounts Objective of the National Transfer Account (NTA) Project ► Introduce age into National Income Accounts  Measure all economic flows across age groups  Public and private  Market and non-market flows  Key sectors: education, health, and pensions  Transfers, saving and investment, credit transactions. ► Estimates for recent years and with historical depth ► Reflect the institutions, culture, and economic systems as they vary over time and around the world ► Use the accounts to analyze  Interplay between age and macroeconomic performance  Evolution of the economic lifecycle and intergenerational support systems  Public policy toward education, health, and pensions.

N ational T ransfer A ccounts Organization of the project ► Lead Institutions  East-West Center (Andrew Mason)  Center for the Economics and Demography of Aging, UC-Berkeley (Ronald Lee) ► Asia Regional Office  Nihon University Population Research Institute (Naohiro Ogawa) ► Funding  National Institute on Aging  United Nations Fund for Population Activities  IDRC (Canada)  MacArthur Foundation  Others ►

N ational T ransfer A ccounts Research Teams for 23 Economies

N ational T ransfer A ccounts Major Activities ► Meetings (next meeting)  Annual meetings (Seoul, Nov 5-6, 2007)  Intl conferences (Tokyo, Nov 1-3, 2007)  Training Workshops (Honolulu, June 2008) ► Scholarly publications  Working papers, journal articles, etc.  Comparative volumes (planned) ► Policy analysis  UN Commission on Population and Development 2007  UN World Economic and Social Survey 2007  IMF Finance and Development  Asian Development Bank ► NTA Public Data Base

N ational T ransfer A ccounts National Transfer Accounts in Brief ► Economic lifecycle  Public and private consumption by age  Labor income by age ► Age reallocations or inter-age flows  Transfers ► Public ► Private including bequests  Asset-based ► Asset income ► Saving and dis-saving

N ational T ransfer A ccounts The Flow Account Identity ► Inflows  Labor Income  Asset Income  Transfer Received ► Outflows  Consumption  Saving  Transfers Paid

N ational T ransfer A ccounts

NT Flow Account, Aggregate. Taiwan, 1998 (NT$ billion), nominal Age Total Lifecycle Deficit 8321,7047-1, Consumption6,5701,7751,1632, Private Private5,2901, , Public Public1, Less: Labor income 5,738701,1563, Lifecycle deficit is the difference between production and consumption over the lifecycle. All values are totals for the age group. Per capita values are also estimated.

N ational T ransfer A ccounts Public & Familial Transfers Asset-based Reallocations Asset-based reallocations involve inter-temporal exchange.

N ational T ransfer A ccounts

NT Flow Account, Aggregate. Taiwan, 1998 (NT$ billion), nominal Age Total Reallocations8321,7047-1, Asset-based reallocations Income on Assets Income on Assets2, , Less: Saving Less: Saving1, , Transfers-291, , Public Public Private Private-311, , Bequests Bequests Lower panel measures the reallocation systems employed to satisfy the lifecycle deficits and surpluses at each age.

N ational T ransfer A ccounts Data Requirements: General ► Accounts are national level – based on National Income Accounts, nationally representative surveys, national population estimates, etc. ► Age-profiles use single years of age up to 90+ if possible. Large sample sizes are helpful. ► Methods involve analysis of individual records. Only per capita and aggregate age profiles are produced and reported. ► For some purposes, successive surveys provide useful information.

N ational T ransfer A ccounts Data Requirements Economic Lifecycle ► Private consumption  Income and expenditure surveys ► Household roster with age of each household member ► Household consumption  Education, health, imputed rent on owner-occupied housing, and other consumption  School enrollment for each member  Other indicators of individual consumption (health utilization, for example)

N ational T ransfer A ccounts Data Requirements Economic Lifecycle ► Public consumption  Administrative records ► Education: Enrollment by age and education level and unit costs of education ► Health: Various methods ► Other: Constant per capita ► Labor income  Earnings for individuals by age from Income and Expenditure Survey or Labor Force Survey  Self-employment income estimated as share of operating surplus or mixed income from income survey

N ational T ransfer A ccounts Data Requirements Asset-based reallocations ► Age-profiles of asset income  Household income survey  Wealth survey (rarely) ► Age-profiles of saving  Household income and expenditure survey

N ational T ransfer A ccounts Data Requirements Transfers ► Inter-household private transfers  Income and expenditure survey ► Intra-household transfers  Income and expenditure survey ► Public transfers  Tax profiles: asset income or assets by age  Inflows: households surveys and administrative records

N ational T ransfer A ccounts Data Requirements Bequests and Other ► Bequests  Life tables  Headship rates – repeated cross-sections from censuses and/or surveys ► Other  National Income and Product Accounts  Population estimates by single year of age

N ational T ransfer A ccounts The End