Intergenerational equity in economic, psychological, and sociological contexts, is the concept or idea of fairness or justice between generations. The concept can be applied to fairness in dynamics between children, youth, adults and seniors, in terms of treatment and interactions. It can also be applied to fairness between generations currently living and future generations.
Conversations about intergenerational equity occur across several fields. It is often discussed in public economics, especially with regard to transition economics, social policy, and government budget-making. Many cite the growing U.S. national debt as an example of intergenerational inequity, as future generations will shoulder the consequences. Intergenerational equity is also explored in environmental concerns, including sustainable development, global warming and climate change. The continued depletion of natural resources that has occurred in the past century will likely be a significant burden for future generations. Intergenerational equity is also discussed with regard to standards of living, with the focus falling on inequities in the living standards experienced by people of different ages and generations. Intergenerational equity issues also arise in the arenas of elderly care and social justice.
Intergenerational Equity & Issues
- One of the primary objectives of intergenerational equity is the development of resources by one generation to enhance economic sustainability for the future generation.
- Intergenerational equity has become crucial in the present times, due to the growing imbalance in the distribution of resources, ongoing degradation of environment and depletion of resources.
- This imbalance is more profound between the developed & developing nations or between the Global North and the Global South.
- Moreover, the developed countries are today unwilling to help developing countries adapt and mitigate climate change, which is a result of their ruthless pursuit to economic growth at the cost of the environment.
- In this context, the concept of sustainable development has been introduced, which refers to the use of resources should be done in such a manner that those resources shall also be available to meet the future needs.
Standards of living usage
Discussions of intergenerational equity in standards of living have referenced differences between people of different ages as well as differences between people of different generations. Two perspectives on intergenerational equity in living standards have been distinguished by Rice, Temple and McDonald. The first perspective a “Cross-sectional” perspective focuses on living standards at a particular point in time and how these living standards vary between people of different ages. The relevant issue is the degree to which, at a particular point in time, people of different ages enjoy equal living standards. The second perspective a “cohort” perspective focuses on living standards over a lifetime and how these living standards vary between people of different generations. For intergenerational equity, the relevant issue becomes the degree to which people of different generations enjoy equal living standards over their lifetimes. Three indicators of intergenerational equity in economic flows, such as income, have been proposed by D’Albis, Badji, El Mekkaoui and Navaux. Their first indicator originates from a cross-sectional perspective and describes the relative situation of an age group (retirees) with respect to the situation of another age group (younger people). Their second indicator originates from a cohort perspective and compares the standards of living of successive generations at the same age. D’Albis, Badji, El Mekkaoui and Navaux’s third indicator is a combination of the two previous criteria and is both an inter-age indicator and an intergenerational indicator.
In Australia, notable equality has been achieved in living standards, as measured by consumption, among people between the ages of 20 and 75 years. Substantial inequalities exist, however, between different generations, with older generations experiencing lower living standards in real terms at particular ages than younger generations. One way to illustrate these inequalities is to look at how long different generations took to achieve a level of consumption of $30,000 per year (2009-10 Australian dollars). At one extreme, people born in 1935 achieved this level of consumption when they were roughly 50 years of age, on average. At the other extreme, Millennials born in 1995 had achieved this level of consumption by the time they were around 10 years of age.
Considerations such as this have led some scholars to argue that standards of living have tended to increase generation over generation in most countries, as development and technology have progressed. When taking this into account, younger generations may have inherent privileges over older generations, which may offset the redistribution of wealth towards older generations.
Elderly care usage
Some scholars consider the changing cultural trends that move society away from the norm of adult children caring for elderly parents to be an intergenerational equity issue. The older generation had to care for their parents, as well as their own children, while the younger generation must only care for their children. This is especially true in countries with weak social security systems. Professor Sang-Hyop Lee describes the presence of this phenomenon in South Korea, explaining that the current elderly now has the highest poverty rate among any developed country. He notes that it is particularly frustrating because the elderly usually invests a lot in their children’s education, and they now feel betrayed.
Other scholars express different opinions on which generation is truly disadvantaged by elderly care. Professor Steven Wisensale describes the burden on current working age adults in developed economies, who must care for more elderly parents and relatives for a longer period of time. This problem is exacerbated by the increasing involvement of women in the workforce, and by the dropping fertility rate, leaving the burden for caring for parents, as well as aunts, uncles, and grandparents, on fewer children.
Social justice usage
Conversations about intergenerational equity are also relevant to social justice arenas as well, where issues such as health care are equal in importance to youth rights and youth voice are pressing and urgent. There is a strong interest within the legal community towards the application of intergenerational equity in law.