@ConnectingGens Kicking off his presentation, James Sefton notes that his works aims to assess resources and transfers between generations, including private transfers within families and state transfers. Brace yourselves, this is a massive piece of research!
@ConnectingGens Introducing his work he said that state transfers are looking more equitable than many might expect, However, private consumption trends across generations are 'perilously unsustainable'...
@ConnectingGens Starting with the labour market, James notes that the share of labour income across generations has remained remarkably stable over time - though everything has shifted right - young people are starting careers later, older generations are retiring later too
@ConnectingGens Moving on to wealth, James highlights the scale of the boom Britain has experienced, primarily pensions and property. It is highly unequally distributed...
@ConnectingGens Though he adds that lower returns to wealth have offset some of these wealth gains. A new period of rising interest rates and falling house prices could start to reverse these long-standing trends....
@ConnectingGens The distribution of Britain's wealth boom:
- Older generations since 2000 have benefited from the wealth boom.
- Current younger generations have not, they have less wealth than earlier generations
@ConnectingGens Will older generations pass on this wealth boom? Yes, 70-80 per cent is likely to be passed down one or two generations. But that's cold comfort for the many young people whose parents or grandparents aren't wealthy.
@ConnectingGens Moving on to the public sector, James says that while public sector debt has increased, public sector net worth (ie its assets) have fallen off a cliff, and public transfers have shifted towards older generations.
@ConnectingGens What does this all mean for consumption - a key metric for living standards? It has grown for older generations, mainly through higher public consumption. Since 2010, consumption has fallen for age groups under the age of 60. This is what recessions and stagnation do for society.
@ConnectingGens Do generations have enough resources to fund their consumption. Yes, for older generations but not for young generations. But the level of private bequest flows down the generations are enough to ensure that all generations have enough resources....
@ConnectingGens However, in contrast to private transfers between generations, public transfer are flowing up the generations. Families are doing their best to ensure intergenerational equity, but the government isn't.....
@ConnectingGens And Jane Falkingham responds to James with some provocations. First up, James' work looks at aggregate data, but what about gender? Here there are some big generational differences....
@ConnectingGens Because while male participation rates in the labour market are high but falling....
@ConnectingGens ...female participation rates are lower but rising (sharply) from generation to generation....
@ConnectingGens Second, Jane says longer lives mean we need to rethink the meaning of age - 75 is the new 50!
@ConnectingGens Rethinking the meaning of age means societal shifts - later marriages, more divorces...
@ConnectingGens ...the age of motherhood is increasing, and there are more childless families. This increases (age-based) distances between generations, and will impact on the private wealth generational transfers that James says are vital for upholding younger generations consumptions patterns.
@ConnectingGens And now onto our Q&A, chaired by Lord Willetts. He notes that there are huge distributional challenges to a society that relies too much on private inter-generational transfer to fund future consumption. Why? Because wealth is unequally distributed within generations.
@ConnectingGens Britain has a productivity problem and an inequality problem, but does it have an intergenerational problem too? Only in the public sector, says James Sefton, there is no conflict in the private sector, where generations are working together (and not just through transfers).
@ConnectingGens David pushes back slightly against James. He says that from a intergenerational perspective, his baby boomer generation are better as family members than citizens. Happy to pass down property wealth, but not to generate new property wealth by accepting more house building....
@ConnectingGens David wraps up our event by saying that if Britain moves to a society where inheritance plays an increasing role in determining economic outcomes then family will matter more, and that could reduce young people's geographic mobility (with knock-on effects for productivity).
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The Government’s new Health and Disability Green Paper will deliver tiny income gains for up to four million households, at a cost of major income losses for those who are too ill to work or no longer qualify for disability benefit support. 🧵⤵️
The gains? A boost Universal Credit (UC) support for up to four million families without any health conditions or disability by around £3 a week.
But these are overshadowed by reforms that risk causing major income losses for those too ill to work, or no longer qualify for disability benefits.
The Government plans to save £5 billion through restricting PIP by making it harder to qualify for the ‘daily living’ component.
PIP is a benefit paid regardless of whether someone is in work, to compensate for the additional costs of being disabled.
There are rumours that the Government is looking to cut the benefits bill as it tries to reduce public spending.
But has there been a huge rise in welfare spending in recent years? A quick thread👇
Social security spending rose by around 1% of GDP from the eve of the financial crash to last year, driven by rising spending on the State Pension and non-pensioner health-related benefits.
A rise yes, but hardly ‘huge’. So, is the problem rising welfare spending in the future?
The @DWP forecast is in fact for welfare spending to stay flat as a proportion of GDP from now until 2029-30, with forecast rises in spending on health-related benefits offset by the rollout of around £3bn of planned cuts to other non-pensioner benefits.
Earlier today the justice secretary pointed to a “huge rise in the welfare budget” as justification for benefit cuts to reduce public spending. So, how big has the rise in welfare spending been? 🧵
Social security spending rose by around 1% of GDP from the eve of the financial crash to last year, driven by rising spending on the State Pension and non-pensioner health-related benefits.
A rise yes, but hardly ‘huge’. So, is the problem rising welfare spending in the future?
The @DWP forecast is in fact for welfare spending to stay flat as a proportion of GDP from now until 2029-30, with forecast rises in spending on health-related benefits offset by the rollout of around £3bn of planned cuts to other non-pensioner benefits.
Since 1997 earnings have doubled, while house prices have increased *4.5 times*.
Our Research Director Lindsay Judge spoke to @BBCr4today this morning about the state of British housing 🏡🧵
Our current housing crisis is decades in the making.
The UK is not alone in considering itself in the midst of a crisis, but our cramped and ageing housing offers the worst value for money of any advanced economy.
Looking at 'imputed rents' of homeowners as well as actual rents, we spend more on housing than almost every other rich country.
Back for more? - the Resolution Foundation overnight analysis of the 2024 Spring Budget is out now!
To whet your appetite ahead of reading the full report, here's a six-chart thread with a few of the key highlights....
⬇️⬇️⬇️resolutionfoundation.org/publications/b…
1) Filling out the tax sandwich.
A net tax cut of £9 billion is taking effect in the election year. But this is dwarfed by the estimated £27 billion of tax rises that came into effect last year (2023-24) and the £19 billion that are coming in after the election (2025-27).
2) Shifting state support from the rich to the poor.
RF analysis of all major tax and benefit policies announced in this parliament show finds that typical households are set to gain £420 a year on average, while the poorest fifth gain £840 and the richest fifth lose £1,500.
Kicking off our event @_louisemurphy says that Britain has a youth mental health crisis. One-in-three 18-24-year-olds report having a common mental disorder, rising two-in-five young women.
This is having real-world impacts.
On health, more than half a million 18-24-year-olds were prescribed anti-depressants in 2021-22.
And on the labour market, people in their early 20s are now more likely to be economically inactive due to ill-health than those in their early 40s. This is a big shift over the past 25 years...