🚨 New ASI Paper: Boomer and Bust 👴👵💥
Realigning incentives to reduce intergenerational inequality
Roy called Janet over to his computer. ‘Look at this!’ he fumed. ‘What’s that dear?’ Janet replied, puzzled by Roy’s outsized frustration at the pair of burgundy corduroy expandable waist trousers for forty pounds on his screen.
‘Not that, this!’ said Roy, right-clicking the next tab over and selecting ‘Open this tab.’ ‘That’s the local Beefeater menu for tonight?’ said Janet, now utterly bewildered. Roy finally managed to find the right tab. The Telegraph was reporting breathlessly: ‘Deny rich retirees a state pension, urges think tank.’
Retirees with assets worth more than £1m should be denied the state pension, a leading think-tank has suggested.
The Adam Smith Institute also said the triple lock should be scrapped as it had made rich pensioners wealthier while workers had seen their income fall in real terms.
The report by the Adam Smith Institute (ASI) calls for wide-ranging reforms to address the generational inequalities that it says act as a “drag anchor” on the country’s economic growth.
Well, I’m delighted to announce that one of the co-authors of the aforementioned ASI policy paper, was yours truly.
The central thesis of this paper draws upon the lessons from the Triumph Of Janet, the launch essay for this Substack newsletter. I.e. Intergenerational inequality is not just an issue of fairness and equity between the young and the elderly. The ways in which it is expressed are a drag anchor on the productivity and economic growth that Britain desperately needs.
It is only by challenging intergenerational inequality that we will grow the economy, enjoy better living standards and have a strong tax base for our struggling public services — for the elderly just as much as the young. They depend on the NHS and other public services, and without more public funding, outcomes are going to unavoidably worsen.
If there was one thing I thought missing from the Triumph of Janet, it was a proper, in-depth policy analysis. There were a few suggestions and right-direction ideas, but not much was concrete. This is the aim of the new ASI paper, entitled ‘Boomer and Bust: Realigning Incentives to Reduce Intergenerational Inequality’.
While we have described in more detail about how the economic rents being accumulated to the elderly result in deadweight loss that holds back the entire country in profound, expensive ways, the paper leads in to policy suggestions on how we might feasibly amend these incentives.
We conducted some polling too, to ensure that the ideas were supported by evidence. September 2021 research for the ASI indicated that 38% of Britons supported building more homes in their local area, against 33% who opposed it. Now we support has grown by 14pts to 52%, while opposition is down 8pts to 25%.
This headline stat is indicative of the greater concern for issues relating to intergenerational inequality. The knock-on effects are starting to show not just for the young, but for wider society too. It’s absolutely vital that we work out how to shift our country’s incentive structures to better align with a positive future.
You can read this paper, authored by myself, John Macdonald, Head of Strategy at the ASI, and Dr Michael Turner of Freshwater Strategy, here: https://www.adamsmith.org/research/boomer-and-bust-realigning-incentives-to-reduce-intergenerational-inequality