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Generational Accounts

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Generational accounts—the present values of future taxes minus prospective transfers (net taxes) per capita by age and sex—tell us how the burden of paying for government purchases is distributed across generations. For example, the account of 30-year-old males is $196,800. It is positive because, in present value, this group’s tax payments during working years exceed post-retirement Social Security and Medicare benefits. In contrast, 70- year-old males’ generational account is –$89,200 because they pay low taxes but receive large Social Security and health care benefits.

Suggested citation: “Generational Accounts,” Federal Reserve Bank of Cleveland, Economic Trends, no. 98-04, pp. 14, 04.01.1998.

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