National Transfer Accounts (NTA): Assessing the Economic Impact of Population Change

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Participants in the10th Global NTA Conference, November 2014 in Beijing, China

In all modern societies, there are extended periods of dependency at the beginning and the end of life—children and the elderly consume more resources than they produce through their own labor, while working-age adults produce more than they consume. What makes this economic lifecycle possible is the flow of resources across generations through a complex of social, economic, and political institutions. This universal pattern raises important questions for economic planners and policymakers.

How much do people at every age earn, and how much do they consume? How do they acquire and use economic resources to meet their current needs, to support others, and to provide for the future? How do young and old people support themselves—do they rely on their families, on taxpayers through government programs, or in the case of the elderly, on their own savings and investment? And how will the shifts in population age structure that result from changing fertility and mortality rates affect economic growth and the wellbeing of people in all age groups?

Demographic change poses special challenges for policymakers:

  • Can improvements in child health and education lead to a more productive workforce even as the proportion of workers in the population declines?
  • As elderly population expand, will public pension and healthcare programs be sustainable?
  • Will tax payers be able—and willing—to provide financial support for growing numbers of old people?
  • Will the expansion of elderly populations slow economic growth?
  • What are the likely impacts of population aging on inequality?
  • And how can countries take full advantage of demographic dividends—the economic benefits that arise from changes in population age structure due to declining fertility?

Research teams working within the National Transfer Accounts (NTA) network are bringing together data for more than 80 countries around the world and developing analytical tools that will help answer these and other important policy questions. The Counting Women's Work (CWW) project and the AGENTA project within the NTA network are also expanding this analysis to take account of the full economic role of women, including unpaid work in the home and care of children, the elderly, and other community members.

One of the unique features of the NTA project is the development of a unified framework for studying intergenerational economic issues in widely varying cultural, social, political, economic, and demographic contexts. As research teams improve estimates and expand coverage to additional countries and broader time periods, NTA will increasingly be able to provide analysis of sufficient geographic scope and historical depth to support important insights into changing social patterns and the effects of public policy.

The NTA Bulletin presents research results to policymakers.

NTA results have been published in more than 100 journal articles, book chapters, and special reports. Key publications have included the National Transfer Accounts manual: Measuring and analyzing the generational economy, published in 2013 by the United Nations Population Division, Department of Economic and Social Affairs; Population aging and the generational economy: A global perspective, published in 2011 by the International Development Research Centre (IDRC) of Canada and Edward Elgar and finalist for the TIAA-CREF Paul A. Samuelson Award; and Is low fertility really a problem? Population aging, dependency, and consumption, published in 2014 in the journal Science.

NTA has also produced or contributed to several publications aimed specifically at policy audiences. These include 11 issues of the NTA Bulletin, the network's own policy brief; two issues of the NTA data sheet; four articles in Finance & Development, the quarterly magazine published by the International Monetary Fund (IMF); the World Bank's 2015/2016 Global Monitoring Report; and several issues of the Asian Development Outlook, an annual publication of the Asian Development Bank. In addition, NTA scholars give interviews and are frequently quoted by the media.

Support for NTA has been provided by the National Institute on Aging of the United States; the International Development Research Centre (IDRC) of Canada; the William and Flora Hewlett Foundation; the Bill & Melinda Gates Foundation through the Gates Institute for Population and Reproductive Health at the Bloomberg School of Public Health; the United Nations Population Fund (UNFPA); the United Nations Population Division; the Asian Development Bank; the World Bank; the John D. and Catherine T. MacArthur Foundation; and the European Union's Seventh Framework Programme for Research, Technological Development, and Demonstration (GA Nr. 613247).

NTA regions and member countries are:

Asia-Pacific: Australia, Bangladesh, Cambodia, China, India, Indonesia, Iran, Japan, Malaysia, Mongolia, Philippines, South Korea, Taiwan, Thailand, Vietnam

The Americas: Argentina, Brazil, Canada, Chile, Colombia, Costa Rica, El Salvador, Jamaica, Mexico, Peru, United States, Uruguay

Europe: Austria, Finland, France, Germany, Hungary, Italy, Luxembourg, Moldova, Netherlands, Poland, Russia, Slovenia, Spain, Sweden, Turkey, United Kingdom

Africa: Benin, Egypt, Ghana, Kenya, Morocco, Mozambique, Nigeria, Senegal, South Africa

Project coordinators are Ronald D. Lee at the Center for the Economics and Demography of Aging, University of California at Berkeley, and Andrew Mason at the Population and Health Studies Program, East-West Center. The East-West Center serves as the global center of the NTA network as well as the regional center for Asia.

Research teams are conducting NTA analysis that covers more than 80 countries around the world.
11th Global NTA Meeting in Senegal

On 20-24 June 2016, African leaders and more than 100 researchers gathered in Dakar and Saly, Senegal, to present and discuss new research and policy directions related to the generational economy. During the first day, held in Dakar, the Prime Minister of Senegal, former African presidents, ministers, leading scholars, community and religious leaders, and representatives of key regional institutions met to review evidence and to discuss action needed to capitalize on the demographic dividend in Africa. Regional and global institutions represented included the Economic Community of West African States (ECOWAS), the United Nations Population Program (UNFPA), the World Bank, the African Development Bank, the Economic Commission for Africa, and the United Nations.

During the remaining days of the meeting, researchers and policy experts from Africa, Asia, Europe, Latin America and the Caribbean, and North America presented and discussed current and recent research on six themes:

  • Demographic dividend and African development
  • Counting Women's Work: Gender and time use
  • Challenges of population aging
  • Inequality and generational equity
  • The world through the NTA lens
  • NTA frontiers

Regional NTA Activities in Asia

Many countries in Asia have enjoyed a first demographic dividend. This was because fertility decline lowered the proportion of dependent children in their populations compared with the proportion of workers, which has the potential to accelerate growth in per capita income. Countries in East Asia were particularly successful in realizing large demographic dividends, in part because their fertility decline was so rapid. However, the connection between the demographic dividend and economic growth is not automatic. The magnitude of the benefit depends, among other things, on the ability of an economy to absorb and productively employ the large influx of young workers born during previous periods of high fertility.  

East Asian countries and some Southeast Asian countries are far along in their demographic transition and are now beginning to experience rapid population aging. Responses to population aging can lead to very different economic outcomes. There are concerns about slow economic growth due to a large dependent old-age population or low saving rates. Fiscal problems are another concern because tax revenues may not keep pace with entitlement programs such as public pensions and publicly funded healthcare. Limited participation of older people in the labor market makes them particularly vulnerable to poverty, poor access to healthcare, and other risks. Adverse consequences of population aging will be offset, however, if workers increase saving to cover longer life expectancy and if economies enjoying a first demographic dividend increase investment in human and physical capital to improve productivity. These responses to population change, and others, may lead to a second demographic dividend, which can be large and long lasting. What will happen in Asia and elsewhere, however, remains an open question.

Asian Regional Meeting on National Transfer Accounts

Research groups in 10 Asian economies have produced National Transfer Accounts that provide critical information for policymakers addressing the economic impact of demographic change. These are Cambodia, China, India, Indonesia, Japan, the Philippines, the Republic of Korea, Taiwan Province of China, Thailand, and Vietnam. Preliminary work has also been carried out in Bangladesh, Lao People’s Demographic Republic (PDR), Iran, Malaysia, and Mongolia, and research groups in the Maldives, Nepal, and Pakistan are planning to initiate NTA projects in their own countries.

In December 2015, researchers and policymakers from these countries met with specialists from the United Nations Population Fund (UNFPA), the East-West Center, and the University of California at Berkeley to present recent findings from NTA analysis, discuss the economic and demographic situation in their home countries, and decide on future activities under a UNFPA-supported NTA project in Asia. An issue of the NTA Bulletin, Population change and economic growth in Asia: New findings from the National Transfer Accounts (NTA) project, was prepared for the meeting. Training workshops have also been held in Cambodia, Indonesia, Lao PDR, Malaysia, and Nepal. Another major international meeting to discuss NTA findings and policy implications will be held in 2017, and at least one additional issue of the NTA Bulletin will be published related to this work.

Conference on the Demographic Dividend and Population Aging

The East-West Center, in collaboration with Statistics Korea (KOSTAT), organized a Conference on the Demographic Dividend and Population Aging in Asia and the Pacific, which was held in Honolulu, HI, on 29-30 October 2015. Organizers were: Ronald D. Lee of the University of California at Berkeley and Sang-Hyop Lee and Andrew Mason of the East-West Center. Research was presented on population aging in China, Japan, the Philippines, and the Republic of Korea. Papers from the conference were published in December 2016 in a special issue of The Journal of the Economics of Ageing (Elsevier).

Recent and Key Publications

Lee, Ronald, and Andrew Mason (2017). Cost of aging. Finance & Development. 54(1): 7–9.

Lee, Ronald, Andrew Mason, and members of the NTA network (2014). Is low fertility really a problem? Population aging, dependency, and consumption. Science. 346:229-34. DOI: 10.1126/science.1250542.

United Nations Department of Economic and Social Affairs (2013). National Transfer Accounts manual: Measuring and analyzing the generational economy. New York: United Nations Population Division.

Lee, Ronald, and Andrew Mason, lead authors and editors (2011). Population aging and the generational economy: A global perspective. Cheltenham, UK: Edward Elgar.

Lee, Ronald, and Andrew Mason (2011). The price of maturity. Finance and Development 48(2): 6–11.

National Transfer Accounts Bulletin

Counting women's work: Measuring the gendered economy in the market and at home. NTA Bulletin No. 11. January 2017.

Population change and the economnic security of older people in Asia. NTA Bulletin No. 10, September 2016.

National Transfer Accounts and demographic dividends. NTA Bulletin No. 9, July 2016.

Population change and economic growth in Asia: New findings from the National Transfer Accounts (NTA) project. NTA Bulletin No. 8, November 2015.

Human-resource development and demographic change in China. NTA Bulletin No. 7, October 2014.

Population change and economic growth in Africa. NTA Bulletin No. 6, August 2013.

Lower-income countries and the demographic dividend. NTA Bulletin No. 5, December 2012.

How well do societies meet the consumption needs of all age groups? NTA Bulletin No. 4, June 2012.

The economic consequences of population aging: Report on a technical policy seminar. NTA Bulletin No. 3, December 2011.

Transferring resources between age groups: What roles do governments play? NTA Bulletin No. 2, May 2011.

National Transfer Accounts: A new way to look at population change and economic growth. NTA Bulletin No. 1, January 2011 (revised September 2011).

Principal Collaborating Scholars

Ronald D. Lee, Edward G. and Nancy S. Jordan Endowed Chair in Economics; Professor of Demography; and Director, Center on the Economics and Demography of Aging, University of California at Berkeley
Gretchen Donehower, Academic Specialist/Researcher, Center on the Economics and Demography of Aging, University of California at Berkeley
Naohiro Ogawa, Director, Nihon University Population Research Institute, Tokyo, Japan
Tim Miller, Population Affairs Officer, Centro Latinoamericano y Caribeño de Demografía (CELADE), Santiago Chile
Adedoyin Soyibo, Professor, Department of Economics, University of Ibadan, Nigeria
Germano Mwiga Mwabu, Professor, Department of Economics, University of Nairobi, Kenya
Alexia Fürnkranz-Prskawetz, Research Group Leader, Population Economics, and Deputy Director, Vienna Institute of Demography, Austria

See all current East-West Center Research Projects.