4. Delivering Fair Policy Outcomes For All Generations
This chapter will discuss how governments can foster intergenerational justice in policy-making and public governance. The notion of intergenerational justice underlies many of today’s most heated debates, such as the sustainability of national deficits, the depletion of natural resources or the extinction of endangered species and pollution. It is also characteristic of debates in the field of social policy, especially due to an ageing population across all OECD countries, and frames discussions about inclusive participation in decision-making. However, demographics are not a fate – policies and institutions matter. Indeed, a growing number of OECD countries has created dedicated institutions, laws, and public administration tools to design policies and deliver services that fit all generations.
The COVID-19 pandemic has placed concerns about intergenerational solidarity and justice prominently in the policy arena (OECD, 2020[1]). In the wake of the crisis, media reports about young people shopping groceries for the elderly in isolated care facilities created a new sense of intergenerational support. With the adoption of large-scale economic stimulus packages by governments, the focus has shifted to the question how governments can “build back better” for all generations.
Intergenerational justice had been a hot topic long before COVID-191 due to population ageing, the legacy of the global financial crisis (see Chapter 1) and, more recently, the debate about climate justice. In particular, demographic change is raising new questions about the sustainability of public service delivery models which were built to meet the demands of younger societies. As societies across OECD countries are ageing, the old-age dependency ratio, which compares the economically inactive population (65 and over) to the working age population (16-64), will change significantly. Whereas in 1990, an average of 21 individuals aged 65 and over faced 100 persons of working age (20-64) across OECD countries, this share increased to 31 in 2020 and is projected to rise to 53 by 2050.2 The increase in the numerical weight of older age cohorts has important implications for the allocation of public resources. For instance, in 2015, governments across OECD spent 2.2 times more on public pensions than on public education, up from a factor of 1.6 in 2000.3 Differences between countries with similar demographics confirm that public spending patterns are driven by policy choices and longstanding governance cultures rather than being determined by demographics alone (Vanhuysse, 2013[2]; Lynch, 2006[3]).
Population ageing also reshapes the composition of the electorate and political weight of different age cohorts with important implications for democratic decision-making. While age alone cannot predict policy preferences, and each age cohort is in itself heterogeneous due to differences in socio-economic background, gender, geography, ethnicity and other identity factors, ageing societies must seek to ensure a fair participation and representation of all age cohorts in public life and policy-making.
This chapter will explore the magnitude of inequalities across generations and map innovation in governance to integrate intergenerational justice in policy-making and governance. The chapter:
1. analyses recent and future demographic trends, pointing out that the magnitude of “ageing” affects OECD countries differently;
2. discusses intergenerational justice as a policy objective; and
3. maps political leadership, government policies and strategies, accountability and oversight institutions, anticipatory and adaptive tools and efforts to promote age diversity in public life and decision-making to promote intergenerational justice.
The OECD Global Strategy Group (GSG) recognised population ageing as a megatrend with impacts on the core functions of government in 2019.4 The fact that people are living longer and healthier lives due to improvements in the access and coverage of health care, medical progress and healthier lifestyles is a success story. However, population ageing also creates a need for reform. To avoid inequalities to compound over the life cycle, policies need to integrate a life-course perspective with concerted efforts to address existing gaps among the younger generation.
All OECD countries are ageing but the magnitude of demographic change differs significantly. Over the last 30 years, the median age increased by 8.2 years on average from 32.8 years in 1990 to 41 years in 2020. Over the next 30 years, United Nations projections forecast that all OECD countries will age to an average median age of 46.8 years by 2050.5 This development is driven by an increase in life expectancy and low fertility rates. Life expectancy at birth increased by six years from 74.5 years in 1990 to 80.9 years in 2018.6 Between 1990 and 2017, life expectancy at 65 increased from 17.9 years to 21.4 years for women and from 14.3 years to 18.1 years for men.7 In turn, the average fertility rates decreased from 1.95 to 1.668 due to changing family norms, changing patterns of residential mobility and partially because female labour force participation increased (Vanhuysse and Goerres, 2012[4]). As a consequence, since 1990, the share of people aged less than 15 declined from 22.5% to 17.7% whereas the share of people aged 65 and over increased from 11.6% to 17.2% in 2018 respectively.9
Figure 4.1 illustrates the evolution of the median age for all OECD counties between 1990, 2020 and 2050 (projections). This figure can be read in two ways. First, the length of each straight line indicates the magnitude of demographic change between 1990 and 2050: a longer line indicates a more significant change in the age composition. Second, it illustrates that some countries are expected to age much faster over the coming decades than others. For instance, whereas Lithuania and Latvia experienced a rapid ageing of their population over the past 30 years, this process is expected to slow down over the next decades. On the other hand, Colombia Luxembourg and Chile are projected to age faster. In absolute terms, Korea and the relatively young societies of Chile, Turkey and Mexico are projected to age faster than any other OECD country.
Source: Based on United Nations, Department of Economic and Social Affairs, Population Division (2019). World Population Prospects 2019, custom data acquired via website.
Promoting a fair distribution of costs and entitlements across different generations and spurring social and economic inclusion concerns the core functions of government – from rule-making to public budgeting to public decision-making (Vanhuysse and Goerres, 2012[4]). The following sections will discuss intergenerational justice as a policy objective and analyse the political leadership demonstrated by countries to integrate an intergenerational justice lens in policy-making and governance. It will also map the policies and strategies, accountability and oversight institutions, and anticipatory and adaptive tools government have put in place and their efforts to promote age diversity in public life and decision-making.
Fairness between generations is the idea that “the pursuit of welfare by the current generation should not diminish the opportunities for a good and decent life for succeeding generations“ (United Nations, 2013[5]). Whereas “intergenerational equity” is concerned with the fair inter-temporal distribution of endowments, often within an environmental context,10 “intergenerational justice (IJ)” can be understood as a broader concept which involves, apart from distributive, also procedural, restorative, and retributive dimensions (United Nations, 2013[5]).
As a concept, intergenerational justice describes relations among contemporary generations, such as between children and their parents or between younger and older generations. In the context of sustainable development, intergenerational justice claims that contemporary generations have obligations towards past and future generations, for instance by omitting to leave yet unborn generations with unwanted debt, capital and legislation (Meyer, 2015[6]; Thompson, 2010[7]; Gosseries and Meyer, 2009[8]). This chapter will cover both dimensions – fairness between contemporary generations and between past and future generations.
Intergenerational justice gained global prominence beyond academic circles with the Brundtland report in 1987 (“Our Common Future”), which identifies as sustainable “development that meets the needs of the present without compromising the ability of future generations to meet their own needs” (World Commission on Environment and Development, 1987[9]).11 Translating intergenerational justice into practice in policy-making, however, entails methodological and practical challenges, especially in relation to future generations. How far into the future do the responsibilities of contemporary generations extend (e.g. to immediate successors or more distant generations)? How should governments weight the interests of contemporary generations against future generations? While these considerations cannot be discussed in detail here,12 it is important to note that they have important implications for policy and measurement.
Inequality between generations in ageing societies
Inequalities between generations (horizontal inequalities) can affect any age cohort. It is important to recognise this fact in order to avoid a biased selection or interpretation of indicators. Moreover, addressing gaps in intergenerational justice should not be pursued at the expense of investing less efforts into addressing inequalities within the same age cohort (vertical inequalities).
At the same time, young people are at a crucial life stage in which their access to education and training, decent employment, housing and other dimensions has a significant influence on future trajectories (see Chapter 1 and 2). Children, adolescents and young adults will also bear the consequences of the decisions taken by policy makers today for the longest time, also in policy arenas in which quick turnarounds are difficult to achieve (e.g. climate change). Results from studies measuring intergenerational justice in the United Kingdom (UK) and Italy found that the prospects for young people and generational fairness have deteriorated over recent years. Key drivers include increasing pension liabilities per worker and healthcare costs, high levels of relative youth unemployment, increasing government debt per person and rising housing costs in the UK (Leach and Hanton, 2015[10]), and negative trends for youth in income and wealth, access to housing and increasing pension liabilities in Italy (Monti, 2017[11]).
Intergenerational justice is a complex concept and there is no universally accepted approach to measuring what is fair from a generational perspective. The OECD Framework for Measuring Well-Being and Progress fulfils two important criteria to shed light on this question. It provides a framework to analyse existing inequalities across age cohorts by acknowledging the multi-dimensional nature of well-being (beyond GDP and other economic indicators); moreover, it takes into account the intertemporal dimension of well-being by analysing the evolution of the economic, natural, human and social capital in a country.13
Figure 4.2 demonstrates that young people (aged below 26) fare worse than the middle-aged (26-50) and older people (51 and above) in work-related outcomes, most notably in terms of their access to employment and earnings, which risks to delay their path to financial independence (see Chapter 1). Young people are also significantly less likely to vote than older age cohorts (see Chapter 3). On the other hand, young people generally enjoy more social support and interactions than the middle-aged and elderly. They are less likely to work long hours, and express higher life satisfaction overall. Interestingly, youth are also slightly less likely to feel that they do not have a say in government (OECD, 2020[12]). This snapshot demonstrates that policy makers must give careful consideration to analysing existing divides across generations.
Source: (OECD, 2020[12]).
Despite the central role of public governance to deliver policies and services in a fair manner across different age cohorts, there is no international framework to guide policy makers in this effort. This is despite the well-acknowledged fact that short-termism in policy-making – the dominance of short-term considerations at the expensive of long-term interests – underlies many of the questions about a fair distribution of endowments and costs across current and future generations. This chapter will attempt to address this gap and introduce a framework to explore how governments can pro-actively foster intergenerational justice from a public governance perspective.
The lack of structures to encourage long-term thinking is a systemic risk to intergenerational justice. Therefore, governments seeking to foster intergenerational justice must acknowledge that any decision taken in the present profoundly affects the ability of youth and future generation to enjoy the same opportunities as their parents and ancestors.
The analytical framework presented in Figure 4.3 draws on a review of OECD’s work on achieving more inclusive and future-oriented policy outcomes, in particular as identified by the OECD Youth Governance Framework (OECD, 2018[13]), the OECD Recommendation on Policy Coherence for Sustainable Development (OECD, 2019[14]), the OECD Recommendation on Open Government (OECD, 2017[15]) and the OECD Recommendation on Gender Equality (OECD, 2015[16]).
Source: OECD.
The following sections will focus on innovative country practices for embedding considerations of intergenerational fairness into policy design, implementation and monitoring and evaluation, public spending and public decision-making. Where feasible, they will assess the impact of these mechanisms and draw conclusions to build governance capacity for intergenerational justice.
Demonstrating political leadership
Intergenerational justice cuts across various ministerial departments and portfolios. Political buy-in is therefore critical to unite the whole of government and public administration behind the objective of ensuring a fair distribution of entitlements across generations. Such commitments must be anchored within government structures to ensure a long-term perspective.
Figure 4.4 demonstrates a strong business case for promoting intergenerational justice at the highest level of government. It illustrates that countries in which age-related inequalities are lower, citizens tend to express higher levels of life satisfaction. Where the gaps in life satisfaction between the age cohorts is significant, overall life satisfaction is lower. The figure also shows that, despite the challenges outlined in Chapter 1 of the report, young people (15-29) express broadly similar levels of life satisfaction (7.7 out of 10) when compared to the age group 30-49 (7.5) and those aged 50 and over (7.2). Young people are less likely to report negative affect balance, which captures the share of the population reporting more negative than positive feelings on the previous day (i.e. 9% of youth compared to 14% of middle-aged and 15% of older generations for data collected between 2010 and 2018) (OECD, 2020[12]).
Source: (OECD, 2020[12]).
Despite prominent calls for a fair distribution of entitlements across generations, the concept is integrated in a fragmented manner into the legal, policy and institutional structures across OECD countries.
In contrast, through its Living Standard Framework (LSF), New Zealand has established a more holistic approach. The LSF is a tool for analysing policy and providing advice, and a measurement framework to analyse policy impacts across different dimensions of well-being, as well as the distributional implications across age groups, sexes, and population groups from different socio-economic backgrounds. While it is not exclusively concerned with age-related inequalities, it has been a driver of important policy, budgetary and institutional initiatives, in particular to address child poverty and improve child and youth well-being (Box 4.1).
The LSF identifies 12 domains of current well-being (e.g. subjective well-being, income, health, trust and social relations, institutions, etc.) as well as four dimensions of future well-being (i.e. human, social, produced and natural capital). Through the lenses of “risk” and “resilience”, the framework takes into account the governments’ capacity to respond to opportunities and adverse effects in the future.
In 2019, budget bids submitted by government agencies were assessed by using the LSF. This exercise resulted in the first “well-being budget” and five well-being priorities, covering commitments to support mental well-being of under 24-year-olds, reducing child poverty and improving child well-being, and accelerating the transition to a sustainable and low-emissions economy, among others. As a result, the Cabinet adopted the Child Poverty Reduction Act in 2018 and a Child and Youth Well-being Strategy in 2019. Institutionally, Child Poverty and Child Well-being Units were created to form the Child Well-being and Poverty Reduction Group, which is located within the Department of the Prime Minister and Cabinet. The Prime Minister also acts as the Minister for Child Poverty Reduction.
From an intergenerational justice perspective, the most interesting feature of the LSF is its capacity to make visible inequalities across age cohorts and their negative implications for broader economic and social performance. Tools such as the Cost-Benefit Analysis (CBAx) support this perspective by including an intergenerational well-being domain.
Source: (The Treasury, New Zealand, 2020[127]).
Political leadership is more difficult to generate for the somewhat unknown interests and needs of future (yet unborn and hence unable to vote) generations. For instance, despite the ratification of the Paris Agreement by 189 Parties, progress to reduce Greenhouse Gas Emissions (GHG) from domestic production across OECD countries has been slow and is unlikely to deliver on the emission reduction targets (OECD, 2020[12]). At global scale, total atmospheric carbon concentrations are still rising rapidly and CO2 emissions from energy use were at no point higher than in 2018 (OECD, 2020[12]). A 2019 report by the Intergovernmental Science-Policy Platform on Biodiversity and Ecosystem Services finds that around one million animal and plant species are threatened with extinction, many within decades (United Nations, 2019[17]).
Beyond the stock of natural capital, governments must seek to maintain and build up the stock of economic, social and human capital. For instance, in terms of economic capital, government financial liabilities across OECD countries exceeded financial assets by 27 percentage points in 2018 (OECD, 2020[12]). High levels of debt interest payments reduce the capacity of governments to supply public services and to grow and refinance themselves and increase the burden on younger and future generations to finance repayment through lower consumption or productivity increases (Vanhuysse, 2013[2]). Prior to the COVID-19 pandemic, the average government debt per person under 20 years in an OECD country exceeded 165,000 USD in 2017 compared to 50,500 USD in 1995.14 OECD estimates suggest that ageing pressures could increase public debt to an average of 180% of GDP in G20 economies by 2050 in a no-reform scenario, compared to projected debt levels of 94.5% of GDP without ageing pressure (Rouzet et al., 2019[18]). This raises important questions about the distribution of responsibility between current and future generations and the political will to promote fairness across both contemporary generations and between current and future ones (European Central Bank, 2013[19]).
Another public administration which has shown strong political commitment to integrate intergenerational justice considerations in policy-making and governance is Wales in the United Kingdom. With the adoption of the Well-Being of Future Generations Act in 2015, Wales enshrined in law the pursuit of economic, social, environmental and cultural well-being as the central organising principle of the public service. The Act requires all 44 public bodies to set and publish well-being objectives in line with the country’s seven well-being goals. It also commits every public agency to set its own targets for each of the seven objectives, and to publish an annual progress report. Agencies and ministries are required to set progress milestones in relation to 46 national indicators, their criteria for achievement and the timeframe (Box 4.2).
The Well-being goals cover several intergenerational dimensions, such as the efficient and proportionate use of resources and the transformation to a low carbon society. To operationalise the “sustainable development” principle, public bodies are required to think “long term”, “prevent”, “integrate”, “collaborate” and “involve” (see visual).
The Act established a number of important safeguards. Welsh Ministers identify national indicators and set milestones, and public bodies are required to issue public statements when they set their objectives and present annual progress reports. The Future Generations Commissioner (see below) acts as a public oversight body, supported by the Auditor General Wales, which has the mandate to assess the extent to which a public body acts in accordance with the sustainable development principle. At the local level, public service boards set up local well-being plans and are responsible for achieving the well-being goals in their area. Following each election cycle, the incoming government prepares a “Future Trends Report” to anticipate future developments.
Source: (Future Generations Commissioner for Wales, 2020[20]).
While a recent Court case illustrates the difficulties of enforcing intergenerational justice in practice, the Act has raised public attention and awareness for matters that may be considered “unfair” to future generations in Wales.15
Setting a strategic vision
As of 2020, none of the OECD countries has adopted a stand-alone national strategy dedicated to advancing intergenerational justice. The following sections demonstrate that commitments to foster intergenerational solidarity and address intergenerational imbalances are scattered across various policies and strategies, which are focused on sustainable development, specific age cohorts (i.e. youth, elderly/ageing) as well as social, fiscal, and environmental policy. Governments must therefore implement strong co-ordination and oversight mechanisms across all stakeholders involved at the central and subnational level to avoid fragmentation in the implementation of such commitments.
Constitutional provisions
At least eight countries have enshrined the rights of future generations in their Constitution, through clauses related to general, ecological or financial matters (Tremmel, 2006[21]). Based on a review of the Constitute Project database, Table 4.1 lists the direct references to constitutional entitlements for future generations across OECD countries. It illustrates that most commonly, such entitlements are linked to the protection of natural resources, which shall be maintained and safeguarded through sustainable development and the application of long-term considerations.
Direct references to future generations exist further in the constitutional preambles of Estonia, Czech Republic, Hungary, Poland and the Federal Constitution of Switzerland (Tremmel, 2006[21]).
At the multilateral level, the Declaration on the Responsibilities of the Present Generations toward Future Generations (1997), adopted by the United Nations Educational, Scientific and Cultural Organization (UNESCO), is the most explicit in stressing that “the present generations have the responsibility of ensuring that the needs and interests of present and future generations are fully safeguarded.”16 In relation to the impact of ageing on intergenerational solidarity, the Madrid International Plan of Action on Ageing (2002) provides that “solidarity between generations at all levels – in families, communities and nations – is fundamental for the achievement of a society for all ages. Solidarity is also a major prerequisite for social cohesion and a foundation of formal public welfare and informal care systems.” The Plan acknowledges that governments must seek to adjust pension, social security, health and long-term care systems in a context of demographic change and alternating social and economic circumstances to sustain economic growth and development (UNESCO, 1997[23]).
So far, no binding international instrument exists to grant future generations enforceable rights. Nevertheless, alleged violations of the principle of intergenerational justice/equity have been brought to court in Australia, Netherlands, Norway, United Kingdom and United States and in several non-OECD countries. In the Netherlands, in December 2019, the Supreme Court upheld a judgement of 2015 that greenhouse gas emissions must be reduced by a minimum of 25% before 2020 compared to 1990 levels because of their serious impact on the rights to life and well-being (Harvard Law Review, 2019[24]). In February 2020, a court ruled plans for a third runway at Heathrow airport in London illegal on the basis of the climate targets set out in the 2016 Paris Climate Agreement (Carrington, 27 February 2020[25]).
Sustainable development strategies
The adoption of the 2030 Agenda for Sustainable Development provided a new momentum for countries to apply a generational perspective to strategic planning and policy-making (see Table 4.2). Through its 17 Sustainable Development Goals (SDGs) and 169 targets, the agenda acknowledges that current generations must act for the benefit of future generations, emphasising the role youth are playing in passing “the torch to future generations” (United Nations, 2015[26]).
The thematic range and depth of national commitments to intergenerational justice present themselves as diverse as the concept, covering sustainable environment, public finances, social security systems and culture/heritage. Furthermore, Estonia and Latvia point to divides between the generations in skills and cultures, whereas Luxembourg, Czech Republic and Latvia underline the benefits of intergenerational exchanges and intergenerational learning.
OECD countries not covered in this table have integrated key principles of the 2030 Agenda into existing government and national development plans, or designed subnational strategies and plans. For instance, the Community of Flanders in Belgium adopted Vision 2050 in 2016, which points to the implications of a growing population of elderly citizens in terms of both opportunities (i.e. active role in associations and volunteers) and challenges (i.e. pressure on informal care) (Flanders, Department of Public Governance and the Chancellery, 2019[40]).
In part representing a “proxy” for the interests of future generations, young people have been involved in shaping the sustainable development strategies in some countries. In Estonia, the National Youth Council participated in the elaboration of the country’s long-term development strategy, Estonia 2035. The Government of Finland established the Agenda 2030 Youth Group to engage young people in political planning and help ensure a long-term perspective in decision-making in 2017. The group, which is composed of 20 people aged 15 to 28, serves as an advocate for the SDGs in their region, organisations, school and workplaces and participates in the national planning and implementation process by attending stakeholder meetings in the ministries. In Sweden, the Ministry for Foreign Affairs launched the campaign #FirstGeneration in 2016 to raise awareness about the Global Goals of the 2030 agenda and the importance of engaging youth in sustainable development. Similar youth-led groups were created in Denmark, Ireland, Luxembourg, and Slovenia, among others.
National youth strategies
Whereas constitutional provisions and sustainable development strategies primarily focus on the “future well-being” dimension, national youth strategies (NYS) provide a vehicle to advance intergenerational justice objectives for current and future generations. Table 4.3 illustrates that at least 12 of 26 OECD countries with an operational NYS in place use it strategically to pursue such objectives.
First and most common are commitments to intergenerational dialogue (e.g. with references to population ageing in the case of Germany and Switzerland). The youth strategy of Greece includes an indicator to monitor the progress achieved by cities in adopting or supporting intergenerational co-operation programmes. Second, and less frequent are interlinkages between youth policy and the preservation of the environment. Czech Republic and Hungary further point to the transmission of cultural and societal norms and traditions. Commitments to ensure young people’s access to the labour market, housing and social inclusion make up a third group of objectives, which focus on the social dimension of well-being. Finally, the national youth strategy of Ireland commits to breaking the intergenerational cycle of disadvantage, and similar pledges can be found in the strategies of New Zealand and Canada with regard to their native population.
According to the OECD Youth Governance Surveys, 72% of OECD countries with a National Youth Strategy in place or under elaboration pursue broader social and economic objectives. Box 4.3 presents the cases of Germany and Portugal, which explicitly link youth policy to climate protection and environmental literacy.
The OECD 2020 “How is Life” report finds that the material footprint17 has increased since 2010 across OECD countries. This is supported by a study undertaken by (Vanhuysse, 2013[2]), which finds that only seven out of 29 OECD countries produced a “net ecological surplus” in 2008, which represents a country’s bio capacity less its ecological footprint18 to determine the capacity of the natural environment to sustain ecological pressure.
Germany: Innovation Fund “Climate protection as a youth policy”
The National Youth Strategy (In gemeinsamer Verantwortung: Politik für, mit und von Jugend) features the Innovation Fund "Climate protection as a youth policy". The fund is managed by the Ministry of Environment and intends to provide easy access to micro finance for initiatives in the field of extra-curricular education on climate protection and the engagement of adolescents and young adults in climate protection activities. Through its Climate Protection Action Alliance, the ministry engages youth associations in an inter-professional and intergenerational dialogue to take into account young people’s perspectives in the elaboration of the 2030 Climate Protection Programme.
Portugal: Investing in environmental literacy
The national youth strategy in Portugal (Plano Nacional da Juventude 2018-21) includes commitments to invest in the environmental literacy of young people. It covers initiatives such as social support for young people up until age 23 to use public transportation; the promotion of youth volunteering in the context of preserving nature, forests and ecosystems; and support for social and environmental-based entrepreneurship among students.
Source: Germany: (Federal Ministry for Family Affairs, Senior Citizens, Women and Youth, 2019[41]); Portugal: (Portuguese Institute of Sport and Youth, 2018[42]).
Additional research would be needed to better determine the impact of national youth strategies in addressing inequalities within and across different age cohorts, and the creation of economic, natural, social and human capital.
The results of a correlation analysis demonstrate a statistically significant negative relationship between the quality of the NYS and the ecological footprint: in OECD countries with a higher quality NYS, the ecological footprint tends to be lower also when controlling for the proportion of older people (65+)19. This finding may indicate that countries that invest into a quality youth strategy also tend to pay greater attention to ecological sustainability and environmental protection and vice versa. Both efforts may be underpinned by the commitment to improve the living conditions of younger and future generations.
National elderly and ageing strategies
Some OECD countries integrate commitments to intergenerational justice in their national elderly or ageing strategies. Table 4.4 presents selected country examples. For instance, Czech Republic’s National Action Plan Supporting Positive Ageing (2013-17) covered a stand-alone chapter on "Volunteering and intergenerational co-operation", which calls for strengthening stable intergenerational relations, addressing negative stereotyping of seniors in media and fostering volunteering among the elderly to address social exclusion and encourage intergenerational exchanges. Ireland’s National Positive Ageing Strategy (2013) stresses that solidarity between generations should be enhanced and that intergenerational initiatives should be adopted across the different levels of government.
Drivers of intergenerational justice commitments
International commitments, in particular the adoption of the Sustainable Development Goals and the declaration of 2012 as the “European Year for Active Ageing and Solidarity between Generations”, have spurred the proliferation of commitments to fairness across generations in government plans (European Commission, 2014[50]). Furthermore, non-governmental stakeholders and foundations are increasingly vocal about generational divides and the adverse effects of business as usual in light of demographic change and slow progress in the fight against climate change and other areas of intergenerational concern. This is reflected in media coverage, which has displayed concerns about the foundations of future well-being, on the one hand, and a tendency to portray societal discussions about ageing, changing norms and entitlements as a conflict between specific generations (e.g. the “Baby Boomers” and ”Millennials”).20 While the increase in public attention has spurred innovation in governance as presented in this chapter, stirring up “generational conflicts” presents a serious risk to dilute the attention of policy makers from addressing the structural inequalities that exist both within and between different age cohorts.
Effective oversight and co-ordination mechanisms fulfil an important function to promote transparency and accountability in the field of intergenerational justice. The next section will explore the prerogatives of specialised oversight institutions in selected OECD countries.
Accountability and oversight institutions
At least nine OECD countries and Malta have established public institutions to monitor the implementation of government commitments to future generations (Network of Institutions for Future Generations, 2020[51]). Since their creation, however, three entities were abolished or transformed into new public bodies.
The location of oversight institutions for intergenerational justice within the broader governance structure, their level of independence from political considerations, thematic focus, and specific functions and enforcement mechanisms vary greatly across OECD countries. These choices have important implications for their legitimacy and effectiveness.
Indeed, legal, financial and political independence are important requirements for these oversight bodies to operate effectively. Yet, in some countries, changes in political priorities resulted in the dismantling of entities created to promote a longer-term perspective in policy-making. Other countries established safeguards against the dominance of political considerations by enshrining their functions in law and decoupling membership from political appointments.
Location in the governance system and focus
The allocation of clear mandates and responsibilities are critical to determine the scope of intervention. The most common institutional mechanism is in the form of a Parliamentary Commissioner (New Zealand, Israel 2001-06, and Hungary 2008-12), a parliamentary committee with multi-party participation (Finland, Germany) and Ombudsperson (Hungary 2012-now, Malta). In Canada, the Commissioner of the Environment and Sustainable Development is placed within the Office of the Auditor General. Notably, the Committee for the Future in Finland is situated at the Centre of Government within the remit of the Prime Minister.
The most explicit commitment to intergenerational justice can be found in Wales in the United Kingdom. The Guardian for Future Generations encourages public bodies to integrate a long-term perspective in policy-making and to monitor the implementation of the Future Generations Bill (The Future Generations Commissioner for Wales, 2020[52]). In Germany, the Parliamentary Advisory Council for Sustainable Development used to assess progress against the principle of Intergenerational Equity (without being supported by specific indicators), however, this focus was replaced by the larger SDGs framework in 2016 (German Bundestag, 2020[53]). The scope of the Parliamentary Commissioner for Future Generations in Hungary (2008-12) and the Parliamentary Commissioner for Future Generations in Israel used to be broad, to include “areas affecting the quality of life of future generations” in the case of Hungary (United Nations, 2013[5]). Direct references to Intergenerational Justice are less frequent in public bodies, which can count on a longer history. Its core principles are pursued in the context of promoting sustainability (Canada) (Office of the Auditor General of Canada, 2020[54]), environmental protection (New Zealand) (Parliamentary Commissioner for the Environment, 2020[55]) and the anticipation of future developments that exceed election cycles (Finland) (Parliament of Finland, 2020[56]).
Key prerogatives and functions
The Parliamentary Commissioner for Future Generations in Hungary (2008-12) was endowed with far-reaching authority to monitor and evaluate the enforcement of sustainability commitments through law. It was able to pro-actively launch investigations, initiate constitutional and legislative proposals and deal with complaints. As of 2012, its successor, the Deputy Ombudsperson for Future Generations has a narrower mandate and lost its investigative powers (Office of the Commissioner for Fundamental Rights, 2020[57]). In Israel, during its six-year existence, the Commissioner essentially had a veto function on laws with an impact on future generations as the latter could only be passed upon the presentation of his report.
Most of the analysed oversight bodies exert less authority over government and do not hold legislative power or a mechanism to enforce compliance. Instead, they provide expert advice and recommendations and monitor the implementation of commitments by public bodies. They also keep an eye on the integration of intergenerational justice objectives into sector priorities and policies and encourage co-ordination across the whole of government. For instance, in Finland, the main task of the Committee for the Future is to prepare the response of Parliament to the Government’s Future Report. Most entities communicate their findings to the public.
The Finnish Committee for the Future and the Future Generations Commissioner in Wales also consult the public in setting the agenda for future priorities and work programmes. The Commissioner of the Environment and Sustainable Development in Canada is endowed with the function to oversee the petition process. The Parliamentary Commissioner for the Environment in New Zealand deals with public complaints, leads investigations and reports to the parliament.
Finland: Parliamentary Committee for the Future
In 1993, Finland established the Parliamentary Committee for the Future as a standing committee to serve as a think tank for futures, science and technology policy. The Committee for the Future is composed of 17 members from different political parties. Located within the remit of the Prime Minister, its main function is to prepare the response of Parliament (Parliament's Future Report) to the Government's Future Report and to work on long-term issues, which exceed election cycles. The Committee can issue reports, initiate public consultations and set the agenda on future priorities. While it does not hold legislative powers, it can have an influence on government decisions about the budget and work programme at the request of Parliament (Tiihonen, 2015[58]).
In 2016, the Committee held the international seminar "For the next generations" to discuss intergenerational relations and the fair transfer of resources between generations.
Wales: Future Generations Commissioner
The position of the Future Generations Commissioner in Wales is enshrined in the 2015 Well-being of Future Generations Act (see above). Contrary to the Parliamentary Committee for the Future in Finland, the Welsh Government appoints the Future Generations Commissioner for a seven-year term. The Commissioner provides advice to public bodies and public service boards to meet their well-being objectives and may conduct a review into how public bodies are taking account of the long-term impact of their decisions, and make recommendations based on the findings.
In 2019-20, the Commissioner conducted a review into the public procurement practices across all 44 ministries and public agencies to assess the outcomes for current and future generations against four pillars of well-being (social, economic, environmental and cultural).
Source: Finland: (The Committee for the Future, 2016[59]); Wales: (The Future Generations Commissioner for Wales, 2020[52])
The Network of Institutions for Future Generations brings together most of the entities introduced above to share knowledge and disseminate best practices to promote responsible, long-term governance (Network of Institutions for Future Generations, 2020[51]). It also gathers Norway's Ombudsman for Children, which advocates for the rights of children and young people and ensures that Norwegian authorities comply with the Convention on the Rights of the Child (Ministry of Children and Families, 2020[60]). Indeed, Ombudsperson can also play a crucial role in encouraging a more long-term perspective in policy-making (see Chapter 3).
This section demonstrates that independent oversight institutions with a strong mandate and resources can play a critical role in raising public attention to concerns about intergenerational justice. They can act as watchdogs of government action and raise critical questions when a more long-term perspective risks being superseded by short-term considerations. Some, such as the Finish Parliamentary Committee for the Future, also act as agenda setters to anticipate the impact of broader transformations in society and economy across current and future generations.
Future research would be needed to map and assess the impact of the broader institutional environment in which intergenerational justice objectives are promoted, such as to cover the work of the Austrian Court of Auditors in 2016 on “The effective use of public funds with regard to sustainability and intergenerational fairness” (Rechnungshof, 2018[61]). Other relevant stakeholders to include would be independent institutions, parliamentary commissions on children and adolescents’ rights, children and youth parliaments, youth work sector, among others. Moreover, research at national level should also take into account the institutional arrangements established at subnational level of government.
Anticipatory and adaptive governance tools
Integrating an intergenerational lens in policy-making requires adequate awareness (“Intergenerational Justice literacy”), skills, and tools in the hands of policy makers. Capacities must be established within the public administration to consider the intergenerational dimension in programme design and policy-making and to align sector objectives with strategic government objectives. At the organisational level, clear responsibilities should be assigned across public bodies to generate age-disaggregated evidence, scan the horizon for future developments, anticipate the distributional impacts of rule-making and public budgeting, and monitor and evaluate performance.
This section explores the use of anticipatory and adaptive governance tools by OECD countries to promote intergenerational justice. In recent years, countries have started to establish administrative capacity to anticipate, assess and address the generational impact of policies and public budgeting. While none of these tools will replace a political decision, they can provide useful evidence to inform decision-making in the context of uncertainty and policy trade-offs.
Systematic collection of age-disaggregated evidence
The findings from the OECD Youth Governance Surveys that are presented in Chapter 2 illustrate that ministries in charge of youth affairs face significant challenges in the collection of age-disaggregated evidence, in particular when the public service needs of vulnerable groups, and the opportunities for young people to engage in public life are concerned. Box 4.5 presents snapshot data from the OECD report “How is Life 2020” in selected well-being areas for the young, the middle-aged and older people.
Income and wealth
Youth (aged below 26) and older people (aged 51 and above) are more likely to live in households with lower income and wealth, and hence face a greater risk of poverty. Disposable income in households with children and young people, and households with older people is 10% and 4% lower respectively than in the average household for middle-aged people (26-50). Youth and older people also face a higher risk to live in an income-poor household (35% and 20% higher respectively when compared to middle-aged people).
Financial security and poverty
Households with heads aged 35 or younger hold less financial and non-financial assets than households headed by older people, making this group more vulnerable to face financial insecurity, in particular when coupled with lower educational attainment. To some extent, the differences in income can be attributed to the fact that most young people will be in education, training or at the beginning of their professional career. However, OECD evidence demonstrates that when poverty at a young age persists, it compounds with disadvantages in health, education, employment and earnings and can result in higher welfare dependency (OECD, 2017[62]).
Work and job quality
Youth (15-24) and older adults (55-64) are 50% and 20% less likely to be employed than the middle-aged respectively. Youth (20% higher) and older adults (30% higher) also face a higher likelihood of being stuck in long-term unemployment than the middle-aged. In employment, older adults earn 4 percent more every hour than middle-aged adults do. In turn, young people’s hourly earnings are 30% lower when compared to middle-aged adults. Young employees also experience higher job strain than other age cohorts, despite working less long hours than older age cohorts.
Health
Health and its determinants can be transmitted between generations and hence present an important policy area for intergenerational justice (WHO, 2015[63]). As of 2018, 89% of young people (15-24) perceived their health as “good” or “very good” relative to 64% of 45-64 year-old and 44% of those 65 and over.21 Young people face a higher risk to be involved in road traffic accidents and mental health disorders because of alcohol abuse. Suicide rates are generally higher among middle-aged and older people. In light of rapid population ageing the demand for labour-intensive long-term care (health and social care) is expected to increase further. In 2017, an average of 10.8% of people aged 65 and over received long-term care, which presents a 5 percent increase compared with 2007 (OECD, 2019[64]).
Housing
As housing affordability is measured at household data, inequalities across age cohorts are more difficult to determine. Findings from a study for the United Kingdom suggests that young people are finding it harder than previous generations to become homeowners due to the rapid increase in house prices, moreover, most property is held by older people. The study also points to a decline in the number of houses built as a proportion of the number of households over time as a factor to consider (Kingman, 2018[65]).
Note: The report also provides evidence on gaps between different age cohorts in terms of work-life balance, social connections and safety.
Source: (OECD, 2020[12]).
As highlighted in previous chapters, it is important to recognise that within the same age cohort or generation, interests and needs vary significantly. The public service needs of a 15-year old in a rural area will differ from a 24-year old living in a university city, and the concerns of a pensioner in his or her mid-60s are likely to be different from someone aged 80 or above. Blurred age definitions present a major challenge to measure progress in the implementation of intergenerational justice. For the SDGs, for instance, it is common practice to consider persons aged 60 and older to belong to the same age group. The Titchfield City Group on Ageing-related Statistics and Age-disaggregated Data, set up by the Office for National Statistics of the United Kingdom in 2018, is tasked to improve and harmonise statistical measurement of information on population ageing with a focus on improving the measurement of older people (Crofts, 2018[66]).
Governments must seek to ensure that adequate capacities exist within the public administration or can be procured in collaboration with research institutes to collect, manage, and use granular evidence to inform priority setting and monitor progress.
Horizon scanning and future needs
Ageing societies are putting traditional public service delivery models to a test. In a context of growing complexity and uncertainty, demographic change and other megatrends (see Chapter 1) require policy makers to scan the horizon for multiple alternative scenarios and their implications for intergenerational justice. To assess policies or draft regulation from an intergenerational perspective, a methodology must seek to evaluate the long-term impact of public policies and to systematically assess the distributional impacts of public policies across current and future generations.
Strategic Foresight and Anticipatory Governance can provide useful frameworks to generate knowledge about possible different futures and pathways for governments to steer towards more fair and equitable ones. Strategic Foresight can help to integrate a longer-term perspective in policy-making, which is a precondition to define policy challenges as intertemporal and intergenerational. The evidence it generates can spur new thinking about the best policies to adopt today to ensure future well-being as recognised by the OECD Recommendation on Policy Coherence for Sustainable Development (OECD, 2019[14]).
With the support of the OECD Observatory of Public Sector Innovation (OPSI), the city of Oulu in Finland has engaged in an exercise to anticipate the future for youth-at-risk and support them in the transformation towards life in a digital society and automation of work. This initiative aims at building local administrative capacity to work in an anticipatory manner and design public service delivery models that can adapt fast to new challenges. In the city of Vantaa, the initiative has focused on different scenarios for the integration of migrant youth to set up effective governance responses (OECD Observatory of Public Sector Innovation, 2020[67]). Strategic Foresight as applied in Oulu and Vantaa can help to identify, prevent and mitigate actual and potential adverse impacts of events. In light of current and future disruptions, such as the COVID-19 pandemic, strategic foresight should inform strategic planning and programme design to avoid age-related imbalances.
In turn, engaging young audiences in developing future scenarios is critical to empower youth and give voice and agency to those who will live with the consequences of decisions longer than senior decision makers. By bringing children, adolescents and young adults into conversations about their future with other age cohorts, strategic foresight methodologies can foster intergenerational dialogue about ways to address intertemporal challenges and design a more promising future.
Impact assessment tools
As described in Chapter 2, impact assessments are an important element in the toolbox of governments to anticipate the welfare and distributional impacts of policies and programmes as acknowledged by the OECD Recommendation on Regulatory Policy and Governance (OECD, 2012[68]). Regulatory Impact Assessments (RIA) provide a systemic approach to assessing the positive and negative effects of proposed and existing regulations and non-regulatory alternatives. As part of their national RIA systems, some countries have put in place more tailored assessments to generate evidence on the expected impact of draft legislation and regulation on specific population groups, such as through “youth checks”, which broaden the default “adult” perspective in policy-making. Through the Gender-Based Analysis Plus (GBA+), Canada anticipates the impact of regulatory and budgetary proposals on younger and older people (see Chapter 2).
Despite the rhetoric to promote fairness between the generations, there is no applicable standard or approach to assess whether a public policy is fair from an intergenerational perspective. However, the Government of the Netherlands is currently elaborating a “Generation Test” to address this gap (Box 4.6).
Upon the recommendation of the Social and Economic Council of the Netherlands (SER), the Cabinet of the Netherlands is currently elaborating a “Generation Test” for the legislative process and the preparation of political and social agreements. The introduction of the Generation Test responds to the ambition to better understand the effects of policies on young people and to consider their interests more systematically in policy design.
The Generation Test intends to generate evidence on the expected impact of policy and regulatory proposals across generations and to involve young people in the process. In the elaboration process, the Cabinet collaborates with different youth groups, such as the SER Youth Platform (Jongerenplatform) and the Dutch National Youth Council, as well as planning agencies, the Council of State and the SER.
Source: (Minister of Social Affairs and Employment, 2020[69]).
Switzerland’s Sustainability Impact Assessments (SIA) framework presents another innovative example. It draws on a three dimensions (e.g. economic, social and environmental) to promote solidarity both with future generations (intergenerational solidarity) and within the current generation (intragenerational solidarity). The framework is operationalised through 15 sustainability criteria of which three define sustainability through the lens of intergenerational fairness. It holds that, for instance, public money should be managed such that it does not adversely affect future generations. Moreover, it sets out that the impact of environmental disasters should be reduced and the risks of accidents accepted only when no lasting damage will be created for future generations in the event of a worst-case scenario (OECD, 2012[70]).
Sustainability Impact Assessments can inform decision-making and strategic planning by considering cross-cutting, intangible as well as short-term and long-term effects. SIAs can also encourage multi-stakeholder engagement in identifying future challenges and impact, and integrate intergenerational fairness considerations into sector policies, programmes and strategies (OECD, 2020[71]). In the United Kingdom, equality impact assessments (EqIA) take into account the effects of policies on people in respect of disability, gender, racial equality and wider equality areas, including age (Equality and Human Rights Commission, 2009[72]).
Sovereign wealth funds, budget cycle, fiscal policy and public procurement
The allocation of public resources provides another powerful tool for governments to invest in intergenerational justice. Sovereign wealth funds (and pension and “climate justice” funds), the budget cycle, fiscal policy and public procurement practices play a critical role in this regard. For instance, Finland’s Sovereign Wealth Fund and New Zealand’s Superannuation Fund make savings for future needs and generations. The Norwegian Government Pension Fund Global manages the revenues from the country’s oil and gas resources for the benefit of current and future generations.
The integration of an intergenerational justice lens into the budget cycle can shape national development plans, sector strategies, policies and programmes. For instance, the “well-being budget” in New Zealand (see 3.1), which was introduced in 2019, sheds light on horizontal inequalities, the distributional effects of budget allocations across different age cohorts and actual trade-offs faced by policy makers (Government of New Zealand, 2019[73]). The Slovak Council for Budget Responsibility considers intergenerational fairness in connection with the long-term sustainability of public finances (OECD, 2020[74]). The Council quantifies the net contribution to and receipt from public finances of individual age cohorts. In 2019, the European Commission published a Discussion Paper, which is attempts to integrate intergenerational justice considerations in fiscal sustainability analysis, among others by measuring the amount of intertemporal public liabilities that are unfunded claims on future governments’ budgets (Arévalo et al., 2019[75]). In Australia, the intergenerational budgetary forecast is undertaken in the context of publishing fiscal projections of spending and costs (Australian Government, 2015[76]).
As highlighted in Chapter 3, public procurement represents 12% of GDP in OECD countries and is yet another important field that governments can use strategically to respond to citizens’ needs, including youth (OECD, 2020[77]). The strategic use of public procurement to achieve social and environmental outcomes is increasingly recognised and applied (“sustainable public procurement”, “green public procurement”), with more or less explicit linkages to the promotion of intergenerational fairness (Stoffel et al., 2019[78]). Large-scale infrastructure projects deserve a particular notion as mismanagement and corruption can create undue burden on young and future taxpayers. With an expected global investment need of USD 71tn or 3.5% of the annual GDP from 2007 to 2030, infrastructure investments in high-impact sectors such as buildings, vehicles and energy-using products also provide a unique opportunity to reduce greenhouse gas emissions and create a more healthy and sustainable world (OECD, 2020[79]).
As part of the global response to climate change, Ireland launched the Youth Climate Justice Fund in March 2020. In 2020, the Fund will make available EUR 500 000 to support youth-led action and innovation on Climate Justice at community, regional and national level. Projects are eligible when they raise climate justice awareness among young people and empower youth to influence change at different levels of government (Department of Children and Youth Affairs in Ireland, 2020[80]).
Monitoring and performance frameworks
The systematic measurement of progress in addressing intergenerational divides is critical to avoid that societies and economies will bear the long-term economic, social and environmental costs of inaction. Performance measurement systems need to be underpinned by indicators that capture generational gaps and their consequences to well-being today and in the future.
At the request of the Dutch Cabinet, Statistics Netherlands publishes its Sustainability Monitor once a year on “Accountability Day”. The Sustainability Monitor assesses well-being “here and now” (i.e. quality of life in the present), well-being “later” (i.e. resources available for the next generation) and “elsewhere” (i.e. to place the well-being results for the Netherlands in the context of broader global developments). The House of Representatives discusses its findings during the annual Accountability Debate and the Dutch Cabinet officially reacts to its main conclusions (Box 4.7).
The monitor was published for the second time in 2019 to cover the SDGs. It distinguishes between well-being in the present along 29 indicators, divided into eight themes (GDP, well-being, material welfare, health, labour and leisure time, housing, society, safety and environment) and well-being for future generations. To measure the potential for future well-being, it identifies 20 well-being trends based on developments in the economic, social, human and environmental capital stocks, similar to the OECD well-being framework (see visual).
The Monitor compares the results for the Netherlands against the average performance of EU countries. Moreover, based on 12 indicators in the areas "trade and aid", "environment and resources" and GDP, it displays the impact of the level of well-being in the Netherlands on the rest of the world.
Source: (Statistics Netherlands, 2019[81]).
Age diversity in public life and decision-making
As societies age, the share of young people in society is projected to shrink in the future, hence further reducing young people’s political weight in the electorate, in public institutions and policy-making. If not managed, these developments could in turn result in further disenchantment among young people towards their countries’ public institutions.
Chapter 3 discussed the legal, institutional and other barriers young people face to participate in public and political life. Population ageing may exacerbate some of these challenges. When societies age and turnout rates remain stable, the median voter’s age will increase. For instance, the median voter’s age in the United Kingdom is expected to increase from 49 in 2010 to 54 by 2051 (Berry, 2014[82]). An older demographic of eligible voters and higher-than-average voting turnout rates among older relative to younger people has nurtured concerns about the dominance of the interests of older people in political party programmes and the political discourse (Vanhuysse and Goerres, 2012[4]). Moreover, the risk of a pro-elderly spending bias by governments and an increasing marginalisation of young people in the democratic process have been evoked (OECD, 2018[13]; Vanhuysse, 2013[2]). This assumes that a higher numeric share of older people at the ballot box will incentivise politicians to act in their favour, potentially at the expense of the interests of younger generations.
Younger and older voters do not necessarily hold diverging views and interests about the future. Different generations are linked to each other through family bonds, joint experiences and often share similar norms, values and interests. For instance, while adolescents and young adults initiated the Fridays For Future movement, “Seniors for Future”, mobilises senior citizens who expressed the same concerns about preserving the environment for future generations. Existing research suggests that both life stage and generational identity influence political behaviour and that a simple comparison of younger versus older voters is missing the point (Berry, 2014[82]; Hollanders and Koster, 2010[83]; Goerres and Tepe, 2010[84]). While these findings alleviate concerns that the interests of younger electorates will be superseded by those of older electorates, low turnout among youth presents a risk in itself as it may undermine the legitimacy of representative democracy and its institutions over time.
Children, adolescents and young adults are sometimes considered “proxies” for the interests of future generations. To overcome the inherent challenge that current decision-making systems tend to be inclined towards the preferences of present generations, Yahaba Town municipality in Japan has undertaken an experiment. In the discussion about the municipality’s vision for 2060, imaginary “future generation” groups were created as stakeholders to negotiate with present-generation groups in a series of workshops about the municipalities’ policy policies on the road to 2060. The experiment concluded with the adoption of more than half of the measures that the imaginary “future generation” groups had proposed originally, indicating that decision-making preferences had at least somewhat shifted to future generations (Hara et al., 2019[85]).
Chapter 3 also pointed out that the “representation gap” of young people in state institutions and decision-making positions continues to persist. If age matters in priority-setting and political decision-making, one may expect younger decision makers to allocate a higher share of public resources into areas directly or indirectly benefiting young people, such as in education. It is important to keep in mind that this assumption is somewhat simplified as isolating the “age” factor is difficult and older decision makers may be driven by similar motivations as younger ones in order to leave behind a world in which their children and grandchildren will enjoy the same or better opportunities. Keeping these caveats in mind, the next sections will present the results from a correlation analysis run to identify a potential relationship between the age composition in national parliaments and cabinets and government spending across OECD countries.
Cabinet age and spending
The hypothesis that younger decision makers tend to allocate a higher share of the public budget in youth-related policy areas and accumulate less debt was tested along two dimensions and the following indicators:
1. the relative spending of pensions to education: the expected relationship is negative (“the higher the share of young decision makers, the lower spending of pensions relative to education”)
2. the per-head public debt of under 20-year olds: the expected relationship is negative (“the higher the share of young decision makers, the lower the per-head public debt of under 20-year olds”)
For each dimension, the hypothesis was tested in relation to the share of members of parliament below 40 (MPs) and the mean cabinet age (MCs) while controlling for the proportion of 65+ year-olds.22 Both the independent (share of young MPs, mean cabinet age) and dependent variables (i.e. relative pension/education spending, public debt) present “snapshot” data and therefore do not include intertemporal dynamics.23
The statistical analysis does not find any significant relationship between the proportion of young MPs and relative government spending the field of pensions/education24. There is an imprecise relationship in that countries with a higher representation of MPs below 40 tend to have lower per-head public debt of under 20s.25 Neither of these findings is statistically significant. On the other hand, the analysis uncovers thought-provoking patterns of co-variation between the mean Cabinet age and public spending across OECD countries.
Cabinet age and the allocation of public resources
In line with the hypothesis, Figure 4.5 illustrates that countries in which the mean Cabinet age is higher tend to spend more on pensions relative to education. This relationship remains positive when the proportion of older people (65+) is introduced as a second independent variable. The results also show that older societies tend to spend more on pensions relative to investments into education than younger societies. In other words, both a higher mean Cabinet age and older demographics in a society tend to be associated with the allocation of a higher share of public resources to pensions relative to education.
The findings suggest that different drivers are at play at country level. For instance, Mexico, Chile and Israel have rather young societies but older Cabinets than the OECD average and still demonstrate a more balanced allocation of public spending between the generations than most other countries. Italy and Greece have older demographics and older Cabinets and spend significantly more on pensions than on education. Finland, in turn, has one of the oldest societies, but its cabinet members are among the youngest across the OECD and spending between pensions and education is rather balanced.
Note: Bivariate correlation coefficient: 0.28; p-value: 0.10. When controlling for the share of elderly in the population in a trivariate regression, the coefficient for average age of cabinet officials is 0.0006; p-value: 0.11.
Source: OECD calculations based on OECD (2018), Youth Stocktaking Report, OECD Publishing: Paris; OECD Pensions at a Glance (database); OECD (2020), Public spending on education (indicator). doi: 10.1787/f99b45d0-en; OECD Demography and Population (database).
These results suggest that, while both the demographic composition in society and the mean Cabinet age may have an impact on public spending priorities, they are not the only factors at play. Policy choices play an important role and underpin the importance of political commitment to address age-based imbalances.
Cabinet age and fiscal burden
As discussed above, there may be good reasons for a government to take on public debt. For instance, fiscal stimulus packages can support countries weather an economic downturn, such as the COVID-19 crisis, and spur investments into assets with high rates of return and social benefit, such as improved access to education and healthcare or the establishment of strategic infrastructure.
Note: Bivariate correlation coefficient: 0.47; p-value: 0.04. When controlling for the share of elderly in the population in a trivariate regression, the coefficient for average age of cabinet officials is 9672.749; p-value: 0.03.
Source: OECD calculations based on OECD (2018), Youth Stocktaking Report, OECD Publishing: Paris; OECD National Accounts at a Glance (database); OECD Historical Population (database); OECD Demography and Population (database).
The results from the correlation exercise suggest that countries in which the mean Cabinet age is higher tend to have a higher total government debt per under 20 person. This relationship is even stronger when controlling for the proportion of older people (65+) in a trivariate regression. This relationship is consistent across countries with largely varying demographics, such Slovenia, on the younger end, and Portugal and Greece, on the older end. Every mean age year of the cabinet is associated with a rise in predicted public debt for the young by about 10,000 USD. One notable exception is Chile in which total government debt per person under 20 is low in relation to the mean Cabinet age.
The statistical significance of the findings in this section suggests that governments should consider promoting age diversity and inclusiveness in different forms of participation and representation in state institutions, including in senior leadership positions of the government and public administration. Despite significant gaps in practice, there is widespread acknowledgment that gender balance and diversity in public leadership positions are critical to integrate diverse perspectives in policy-making (OECD, 2019[86]).
In contrast, the perception of both young and elderly people (ageism) in leadership positions continues to be dominated by stereotypes rather than an appreciation of the diverse views and experiences different age cohorts can bring on board. Addressing challenges to intergenerational justice hence remains an important task for policy makers across all ages in the years to come.
This chapter has presented evidence demonstrating that the implicit promise that each new generation will fare better than the previous one increasingly stands on shaky grounds. Nothing that the notion of the intergenerational justice underlies many of today’s most heated political debates, and that demographics are not a fate, the chapter has provided a mapping of the efforts undertaken by OECD countries to integrate intergenerational justice considerations in policy-making and governance. It finds that, despite notable innovative practices in building institutional capacities and applying new governance tools to anticipate the distributional impact of public policies and budgeting across different age cohorts, systemic risks persist.
Most notably, governments need to address the lack of structures and incentives to encourage long-term thinking and planning in public institutions and their processes. This involves a fair assessment of all relevant benefits and costs of today’s decisions across current and with regard to unborn generations. It also requires decision makers to bring together the different initiatives, institutions and tools applied under a coherent strategy to address imbalances between generations. A more systematic collection age-disaggregated evidence, the use of strategic foresight and the creation of well-resourced oversight institutions along with the promotion of age diversity in decision-making are some of the pathways to follow for a more robust approach across the whole of government.
To foster intergenerational justice in the context of ageing societies, governments should consider:
1. Demonstrating strong political commitment to act upon inequalities both within and between different age cohorts and address intergenerational challenges.
2. Integrating intergenerational justice considerations in laws, policies, strategies and programmes and promote co-ordination across government to ensure policy coherence.
3. Creating or strengthening oversight institutions/mechanisms to monitor intergenerational justice commitments by ensuring resources and their legal, financial and political independence.
4. Ensure policy makers are aware and have the right skills and public management tools to promote intergenerational justice in policy-making, public spending and decision-making.
5. Promoting age diversity in public life and decision-making.
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Notes
← 1. In 2019, the phrase “OK boomer” went viral on social media and served as a proxy to describe an increasingly tense relationship between the young and the old (BBC News, 7 November 2019[87]).
← 2. OECD (2020), Working age population (indicator). doi: 10.1787/d339918b-en (Accessed on 22 July 2020).
← 3. OECD (2020), Pension spending (indicator). doi: 10.1787/a041f4ef-en (Accessed on 22 July 2020); OECD (2020), Public spending on education (indicator). doi: 10.1787/f99b45d0-en (Accessed on 22 July 2020).
← 4. The GSG brings together Ministers, G7/G20 Sherpas and Senior Officials to discuss global megatrends and how the OECD can support countries in dealing with future challenges and opportunities.
← 5. United Nations, Department of Economic and Social Affairs, Population Division (2019). World Population Prospects 2019, custom data acquired via website.
← 6. Calculated based on (OECD, 2020[94]). Data includes all OECD countries except for Latvia (no data available for 1990). Calculated based on 2018 data except for Japan (2017).
← 7. Life expectancy at age 65 years old is the average number of years that a person at that age can be expected to live, assuming that age-specific mortality levels remain constant. Calculated based on (OECD, 2020[95]). Data includes all OECD countries except for Latvia (no data available for 1990) and Colombia (no data available). Calculated based on 2017 data except for Chile (2016).
← 8. Assuming no net migration and unchanged mortality, a total fertility rate of 2.1 children per woman ensures a broadly stable population. Calculated based on (OECD, 2020[96]) with data for 1990 and 2017.
← 9. OECD (2020), Young population (indicator). doi: 10.1787/3d774f19-en (Accessed on 24 July 2020).
← 10. The OECD Glossary of Statistical Terms defines intergenerational equity as “the issue of sustainable development referring, within the environmental context, to fairness in the intertemporal distribution of the endowment with natural assets or of the rights to their exploitation.” (OECD Glossary of Statistical Terms, n.d.[97]). For a discussion about climate change as an intergenerational problem and its implications for equity among communities in the present and the future, see (Weiss, 2008[98])
← 11. The UN Declaration on Environment and Development, adopted at the “Earth Summit” in Rio de Janeiro in 1992, reaffirmed that “the right to development must be fulfilled as to equitably meet developmental and environmental needs of present and future generations” (UN General Assembly, 12 August 1992[90]). A 2013 report by the UN Secretary General marked another milestone arguing that social cohesion between generations is a cornerstone for achieving sustainable development (United Nations, 2013[5]).
← 12. For an introduction into important concepts in the IJ debate see (Thompson, 2010[7]) on discounting, things of value and global justice; (Vanhuysse, 2013[2]) on how to account for the interests of future generations, future technological progress and for unexpected future exogenous shocks; and (Gosseries and Meyer, 2009[8]) and (Meyer, 2015[6]) on the philosophical principles underlying the concept.
← 13. The Intergenerational Fairness Index, established by the Intergenerational Foundation (UK-based charity), measures the extent to which young people today are at a disadvantage compared to the rest of society and the degree to which future generations will be impacted by the ways in which we live today or by government action. In contrast, the Generational Divide Index (GDI is concerned with the “generational divide“, which assesses the extent of delay that young people face in obtaining full autonomy to pursue life’s pursuit compared to the older generations (i.e. buying a house, borrowing money, pursuing higher education, suitable employment) (Monti, 2017[11]).
← 14. OECD calculations based on OECD National Accounts at a Glance (database) and OECD Demography and Population (database).
← 15. In 2019, parents in the county borough of Neath Port Talbot in Wales challenged the closure of a school on the ground that it was not compliant with the well-being goal of creating "attractive, viable, safe and well-connected communities" (R (B) v Neath Port Talbot CBC). However, the High Court dismissed the case, arguing that the Act could not trigger a judicial review as it prescribed a “high-level target duty which is deliberately vague, general and aspirational and which applies to a class rather than individuals” (Martin, 15 May 2019[99])
← 16. The responsibilities of the present towards future generations are also acknowledged in other UN instruments, such as the Convention for the Protection of the World Cultural and Natural Heritage (1972), the UN Framework Convention on Climate Change and the Convention on Biological Diversity (1992), the Rio Declaration on Environment and Development (1992), the Vienna Declaration and Programme of Action (1993), and the UN General Assembly resolutions relating to the protection of the global climate for present and future generations adopted since 1990.
← 17. The material footprint measures the extraction of raw material to meet economic demands per capita (in tonnes).
← 18. The ecological footprint describes the surface of land and water required by an economy to produce all goods consumed in that economy, and to absorb all wastes generated by their production. It presents an intuitive indicator to assess the pressure put by societies on their natural environment (Vanhuysse, 2013[2]).
← 19. Bivariate correlation coefficient: 0.44 (p-value: 0.03). When controlling for share of older people, an increase of 0.1 points in the quality of the NYS is associated with a decline in the ecological footprint of 0.8 (p-value: 0.02).
← 20. For two largely opposing perspectives on this topic, see (Bristow, 2019[92]) and (Sternberg, 2019[93]), among others.
← 21. OECD calculations based on the OECD Health Status (database).
← 22. In line with the definition of the Inter-Parliamentary Union, “young” members of parliament (MPs) are considered to be 40 years or younger. As for members of cabinet, the assessment relies on the average age of ministers across OECD countries as of February 2018 (OECD, 2018[13]).
← 23. “Snapshot” data measures policy outcomes and efforts/situation today. Further research could complement the findings presented in this Chapter by integrating past and future points in time. Future research could also explore the relationship in other areas such as the budget allocated to the government entity in charge of youth affairs, government-financed expenditures on research and development as percentage of Gross Domestic Product (GDP), etc.
← 24. The correlation coefficient is -.03 (p=.85).
← 25. The analysis yields a modest negative bivariate relationship between higher parliamentary representation of the young and per-head public debt of under 20s. r=-.21 (p=.38). In a trivariate regression with proportion of older people as a second independent variable, the relationship remains negative, but the p-value is at .29, evidence of an imprecise relationship.