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Generational accounting is a relatively new method of national accounting for measuring redistribution of lifetime tax burdens across generations from social insurance, including social security and social health insurance. It has been proposed as a better guide to the sustainability of a fiscal policy than budget deficits, which reflect only taxes minus spending in the current year.[1]

Generational accounting goes beyond conventional government budget measures, such the national debt and budget deficits, by accounting for projected lifetime taxes per capita net of transfers, which are not measured in a pay-as-you-go system of social-insurance accounting. The latter includes only current taxes for retirees less current outlays. Uses include projecting future taxes and outlays from different prospective current policies. For example, if a fall in labor-force growth from an earlier fall in the birth rate is projected to increase the proportion of retirees to the labor force, generational accounting might examine different projected changes in taxes or program benefits to finance the change.[2]

A refutation of generational accounting was put forth to the Federal Accounting Standards Advisory Board (FASAB) in 2009.[3]

See also[]


  1. The Economist, Economics A-Z, "Generational Accounting." Accessed 9 Aug. 2010.
  2. Jagadeesh Gokhale, 2008. "Generational accounting." The New Palgrave Dictionary of Economics, 2nd Edition. Abstract and uncorrected proof.
  3. (2009). The Case Against Intergenerational Accounting: The Accounting Campaign Against Social Security and Medicare. Public Policy Brief No. 98. The Levy Economics Institute of Bard College.

Further reading[]

  • Laurence J. Kotlikoff, 1987. "Social security," The New Palgrave: A Dictionary of Economics, v. 4, pp. 418–20.
  • Generational Accounting: Knowing Who Pays, and When, for What We Spend, The Free Press. 1992. Review extract.
  • Alan J. Auerbach, Jagadeesh Gokhale and Laurence J. Kotlikoff, 1994. "Generational Accounting: A Meaningful Way to Evaluate Fiscal Policy ," Journal of Economic Perspectives, 8(1), pp. 73–94.
  • Robert Haveman, 1994. "Should Generational Accounts Replace Public Budgets and Deficits?" Journal of Economic Perspectives, 8(1), ppp. 95–111.
  • John Sturrock, 1995. Who Pays and When? An Assessment of Generational Accountinghttp. U.S. Congressional Budget Office. Preface, contents, & links by chapter.
  • Peter Diamond, 1996. "Generational Accounting and Generational Balance: An Assessment," National Tax Journal, 49(4), pp. 597–607 (press +).
  • Laurence J. Kotlikoff, 1997. "Reply to Diamond's and Cutler's Reviews of Generational Accounting, National Tax Journal, 52(2). pp. 303-14.
  • Willem H. Buiter, 1997. "Generational Accounts, Aggregate Saving and Intergenerational Distribution," Economica, N.S., 64(256), ppp. 605–626.
  • Laurence J. Kotlikoff and Bernd Raffelhüschen, 1999. "Generational Accounting around the Globe," American Economic Review, 89(2), pp. 161–166.
  • Alan J. Auerbach, Laurence J. Kotlikoff, and Willi Leibfritz, 1999. Generational Accounting Around the World. 534 pp. Preview.
  • Rowena A. Pecchenino1 & Kelvin R. Utendorf, 1999. "Social Security, Social Welfare and the Aging Population," Journal of Population Economics, 12(4), pp. 607–623. Abstract.
  • Holger Bonin, 2001. Generational Accounting: Theory and Application. Springer. Preview.
  • World Bank, 2001. "Generational Accounting." as lecture outline. Simple as ABC.
  • Laurence J. Kotlikoff and Scott Burns, 2005. The Coming Generational Storm: What You Need to Know about America's Economic Future. MIT Press. Description and chapter-preview links, p. vii.
  • Jagadeesh Gokhale & Kent A. Smetters, 2006. "Fiscal and Generational Imbalances: An Update" in James M. Poterba, ed., Tax Policy and the Economy, v. 20, ch. 6, pp. 193–223. MIT Press.
  • Rudy Penner, 2007. "Taxes and the Budget: What is Generational Accounting?" in The Tax Policy Briefing Book: A Citizens' Guide for the 2008 Election and Beyond. Tax Policy Center.
  • U.S. Government Accountability Office. 2008 Financial Report of the United States Government, p. 40, Note 23, with estimated present value of future expenditures in excess of future revenue. Chapter links.
  • John B. Shoven, ed., 2011. Demography and the Economy, University of Chicago Press. Scroll-down description and preview, ch. 4-6 & 8.
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