Intergenerational equity in economic, psychological, and sociological contexts, is the notion of fairness or justice between generations. The concept can be applied to fairness in dynamics between children, youth, adults, and seniors. It can also be applied to fairness between generations currently living and future generations.
Conversations about intergenerational equity may include basic human needs, economic needs, environmental needs and subjective human well-being. It is often discussed in public economics, especially with regard to transition economics,(2005) "Economics of Intergenerational Equity in Transition Economies" The PIE International Workshop (10–11 March 2005) social policy, and government budget-making.Thompson, J. (May 2003) Research Paper no. 7 2002-03 Intergenerational Equity: Issues of Principle in the Allocation of Social Resources Between this Generation and the Next . Social Policy Group for the Parliament of Australia. 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,Carter, Neil. (2005) Core Principles of Sustainable Development Cambridge University Press. Fathom.com 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, specifically 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, social justice, and housing affordability.
Political rights
The debate around youth rights, children's rights and the rights of future generations includes discussions around when people should have political power, and how much they should have. Adam Benforado argues, for example, that giving children more political rights than adults results in everyone being better off by, for example, increasing the salience of long-term issues.
Those seeking rights or greater consideration for future generations discuss methods such as deliberative democracy, an ombudsman for future generations, or other institutions tasked specifically with considering future generations. Some advocates also want a child impact assessment of policies or decisions to evaluate outcomes for a specific child or even the next generation more broadly.
Public economics usage
History Since the first recorded debt issuance in Sumaria in 1796 BC, one of the penalties for failure to repay a loan has been debt bondage. In some instances, this repayment of financial debt with labor included the debtor's children, essentially condemning the debtor family to perpetual slavery. About one millennium after written debt contracts were created, the concept of debt forgiveness appears in the Old Testament, called Jubilee (Leviticus 25), and in Greek law when Solon introduces Seisachtheia. Both of these historical examples of debt forgiveness involved freeing children from slavery caused by their parents' debt.
The leaders of the Haudenosaunee Confederacy considered the precept of seven generation sustainability when making present decisions that could have significant impact on their potential future descendants.
Pope Francis, in his 2015 encyclical letter Laudato si', commented that
Government debt
Higher government debt levels create significant costs for future taxpayers (e.g., higher taxes, lower government benefits, higher inflation, or increased risk of fiscal crisis).Huntley, Jonathan (July 27, 2010). "Federal debt and the risk of a fiscal crisis". Congressional Budget Office: Macroeconomic Analysis Division. Retrieved February 2, 2011. Stanley Druckenmiller and Geoffrey Canada call the large increase in government debt being left by the Baby Boomers to their children "Generational Theft".
Future generations could benefit if the investments made with the debt are more valuable than the amount of debt they created. For example, to the extent that borrowed funds are invested today to improve the long-term productivity of the economy and its workers, such as via useful infrastructure projects, future generations may benefit. Economist Paul Krugman wrote in March 2013 that by neglecting public investment and failing to create jobs, we are doing far more harm to future generations than merely passing along debt: "Fiscal policy is, indeed, a moral issue, and we should be ashamed of what we're doing to the next generation's economic prospects. But our sin involves investing too little, not borrowing too much."
Pensions
Underfunded pensions can shift costs to younger generations, which can be motivated by intergenerational selfishness. The U.S. Social Security system has provided a greater net benefit to those who reached retirement closest to the first implementation of the system. The system is unfunded, meaning the elderly who retired right after the implementation of the system did not pay any taxes into the social security system, but reaped the benefits. Professor Michael Doran estimates that cohorts born previous to 1938 will receive more in benefits than they pay in taxes, while the reverse is true to cohorts born after. Also, that the long-term insolvency of Social Security will likely lead to further intergenerational transfers.Michael Doran (2008). "Intergenerational Equity in Fiscal Policy Reform". Tax Law Review. 61: 241-293 However, Doran concedes that other benefits have been introduced into U.S. society via the welfare system, like Medicare and government-financed medical research, that benefit current and future elderly cohorts.
Investment management In the context of institutional investment management, intergenerational equity is the principle that an endowed institution's spending rate must not exceed its after-inflation rate of compound return, so that investment gains are spent equally on current and future constituents of the endowed assets. This concept was originally set out in 1974 by economist James Tobin, who wrote that "The trustees of endowed institutions are the guardians of the future against the claims of the present. Their task in managing the endowment is to preserve equity among generations."Tobin, James (1974), "What is Permanent Endowment Income?" American Economic Review, American Economic Association, vol. 64(2), pages 427-432, May.
Environmental usage
Intergenerational equity is often referred to in environmental contexts, as younger age cohorts will disproportionately experience the negative consequences of environmental damage. For instance, it is estimated that children born in 2020 (e.g. "Generation Alpha") will experience up to seven times as many extreme weather events over their lifetimes, particularly heat waves, as people born in 1960, under current climate policy pledges. Moreover, on average, played "a leading role in driving up GHG emissions in the past decade and are on the way to becoming the largest contributor" due to factors such as demographic transition, , and higher use of carbon-intensive products like energy for heating and private transport.
Climate change
In 2015, a group of youth environmental activists filed a lawsuit against the U.S. federal government for insufficiently protecting against climate change in Juliana v. United States. Their statement emphasized the disproportionate cost of climate-related damage younger generations would bear: "Youth Plaintiffs represent the youngest living generation, beneficiaries of the public trust. Youth Plaintiffs have a substantial, direct, and immediate interest in protecting the atmosphere, other vital natural resources, their quality of life, their property interests, and their liberties. They also have an interest in ensuring that the climate system remains stable enough to secure their constitutional rights to life, liberty, and property, rights that depend on a livable Future."Juliana v. United States, First Amended Complaint for Declaratory and Injunctive Relief United States District Court, District of Oregon - Eugene Division, filed 9/10/15 In November 2016, the case was allowed to go to trial after US District Court Judge Ann Aiken denied the federal government's motion to dismiss the case. In her opinion and order, she said, "Exercising my 'reasoned judgment,' I have no doubt that the right to a climate system capable of sustaining human life is fundamental to a free and ordered society."Juliana v. United States, Opinion and Order In the United States District Court for the District of Oregon Eugene Division, issued 11/10/16
Australian politician Christine Milne made statements in the lead-up to the 2014 Carbon Price Repeal Bill, naming the Liberal National Party (elected to parliament in 2013) and inherently its ministers, as intergenerational thieves; her statement was based on the party's attempts to roll back progressive carbon tax policy and the impact this would have on the intergenerational equity of future generations.
Strong vs. weak sustainability A "weak sustainability" perspective argues that intergenerational equity would be achieved if losses to the environment that future generations face were offset by greater gains in economic progress (as measured by contemporary mechanisms/metrics). Some adherents also prioritize the moral concerns about those alive today, putting a discount rate on outcomes for future generations when accounting for generational equity.Beckerman, Wilfred. "'Sustainable Development': Is it a Useful Concept?" Environmental Values 3, no. 3, (1994): 191–209. . Others disagree.Brian Barry, 'Sustainability and Intergenerational Justice', in Dobson (1999) (Ed) Fairness and Futurity.Nicholas Vrousalis, 'Intergenerational Justice: A Primer', Institutions for Future Generations, A. Gosseries & I. Gonzalez (eds.), Oxford University Press 2016, pp. 49–64. From the "strong sustainability" perspective, no amount of economic progress (or as measured by contemporary metrics) can justify leaving future generations with a degraded environment. Sharon Beder cautions that the "weak" perspective lacks a knowledge of the future and which intrinsically valuable resources will not be able to be replaced by technology.Sharon Beder, 'Costing the Earth: Equity, Sustainable Development and Environmental Economics', New Zealand Journal of Environmental Law, 4, 2000, pp. 227-243.
Standards of living usage Discussions of intergenerational equity in standards of living reference differences between people of different ages or of different generations. Two perspectives on intergenerational equity in living standards have been distinguished by Australian sociologist and demographers Rice, Temple, and McDonald. The first perspective – a "cross-sectional" perspective – focuses how living standards at a particular point in time 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 how living standards over a lifetime 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.