Family, Household and Economy

Resource distribution among generations

The transfer of resources between age groups is not equally visible to the statistical system. Pension funds, insurance companies or the social security system connect large groups of people who do not know each other. The same applies to public institutions that provide services, such as the education which channels taxpayers’ resources, primarily those of working age. Health care typically connects the active-age and the elderly. The operation of large groups involves administration and accounting, which leaves behind an information trail. This makes it easier to collect data about them. Family transfers are not documented. This means that information on state transfers and other resource reallocations organised by market participants is more easily accessible to the statistical system. Such transactions are more visible than family transfers.

Members of the research group are among the first to use a device, the National Transfer Accounts system to eliminate this information asymmetry. Those who have children face with a heavier financial burden than those who don’t, because the tools used today don’t capture all of the cost items of parenting children. We expect practical applicability from the research in two areas: 1) The first is the operation of pay-as-you-go pension systems. The other area is the so-called 2) More accurate interpretation of Bhagwati tax investigating the brain drain by imposing an extra income tax on skilled labour.