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B. Hammer, A. Fürnkranz-Prskawetz, R. Gal, L. Vargha, T. Istenic:
"Sustainability of Inter-Generational Public Transfers in EU-Countries: A New Indicator Based on Projections of National Transfer Accounts";
Report for OEAW-VID: Projekt AGENTA: Ageing Europe: An application of National Transfer Accounts (NTA) for explaining and projecting trends in public finances; Report No. D7.2, 2016; 29 pages.

We evaluate the sustainability of the public transfer systems in 25 EU countries using
a new indicator based on age-specific economic data from the European National
Transfer Accounts database. Virtually none of the commonly used indicators takes
explicitly into account that inter-generational support and transfers are based on a
mutual exchange between generations: the parental generation invests in children,
who in turn use part of their income to finance pensions and care for the generation
of their parents. Old age provision through transfers requires sufficient investments
into the young generation in the first place. Our indicator contrasts the expected
public benefits of the now elderly population with the expected contributions of
the generation of their children. The results show a considerable human capital
investment gap: the current level of public benefits in old age is appropriate for the
parental generation of the baby-boomers, but hardly sustainable for generations
with low fertility.