‘Plight’ of younger generations revealed in new study
Young people are losing out badly from government policies compared with older generations and the situation has accelerated since the financial crisis of 2008, a study reveals.
The UK’s first annual Intergenerational Fairness Index (IF Index) reveals that young people’s prospects have worsened by six to seven points over the past two years compared to an annual average deterioration of two points up to 2008.
The IF Index, an open-source measurement of how governmental policies affect young people, is based on nine indicators that most affect young people’s lives and outlook – unemployment, housing, pensions, government debt, participation in democracy, health, income, the environment and education.
The Intergenerational Foundation (IF) took these indicators and put them together to create an aggregate of how things have changed over the past 20 years.
Setting the Index at 100 in the year 2000, it has risen in its measure of unfairness from 84 in 1990 to a level of 128 by 2010, based on the latest available data.
The index’s creators said factors influencing the changes include public sector pension liability increases between 1990 and 1995, government debt, public sector pensions and houses prices doubling between 2000 and 2005, tuition fees, government debt and pensions from 2005 to 2011.
The UK, like other developed economies, has engaged in fiscal, educational, health and environmental child abuse: Professor Laurence Kotlikoff, MIT
Angus Hanton, co-founder of IF and joint creator of the index, said: “The IF Index shows that poorer young people are financing richer old people as our society grapples with demographic change and increasing longevity. It puts into stark relief the real plight of younger generations.”
Professor Laurence Kotlikoff, professor of economics at Boston MIT, and the creator of intergenerational accounting for the World Bank in the 1990s said: intergenerational inequity is “the moral issue of our day” and added that the IF Index “makes it vividly clear that the UK is failing its young”.
He said: “The UK, like other developed economies, has engaged in fiscal, educational, health and environmental child abuse.”
IF intends the index, which uses government figures, to be published annually, and to be extended internationally, in order to chart UK intergenerational gains and losses over time and against other countries.
IF is calling on the government to take action to push the index down to pre-2008 levels, in order to swing the pendulum back towards “intergenerational balance”.