Generational Economics in a Changing World

Ronald Lee, University of California, Berkeley
Andrew Mason, University of Hawaii at Manoa

In hunter gatherer societies, children were nutritionally dependent until age 20, and transfers of food flowed downward from adults of all ages including the elderly. Under intensive agriculture, perhaps due to property rights in land, the elderly became net consumers in a stage of partial retirement, sustained in part by transfers of food from their adult children, but net transfers were still downward. As agriculture gave way to industry, retirement came earlier and was more complete. As societies industrialized and the welfare state grew, transfers to the elderly for pensions and health care became increasingly important. Population aging has interacted with these public programs for the elderly, leading to a reversal of the historical pattern of resource flows across age, from downward to upward.