Thursday 12 July 2012

War of ages

So it's all about the intergenerational conflict and how the old are sucking the life out of the young, and how the young might cut the oldies off. Nolan makes some threats. Bill shows that the oldies will never have the numbers to outvote the young folks so they'd better behave themselves. Nick Gillespie figures the same thing's set to happen in the States.

But there's a problem. Young people generally support giving money to old people. Or at least every bit of US evidence I'd previously seen suggested that young people would rather have the state take care of their aging parents and inlaws. support transfers to the elderly.

What does the New Zealand data say? This is just a 5 minute cross-tab. But the 2008 New Zealand Election Survey has an age variable, and it has a question: "Should the government be responsible for the old?".

If you run a straight correlation between the age variable, zage, and the "should the government support old people" variable (zgovold), where higher numbers mean "shouldn't", I get a -0.0462. So older people are slightly less likely to support giving lots of money to old people.

Let's break things up. Split the age cohort variable into the under 40s, the 40-64 year olds, and the 65+ folks. Not correcting for anything else. What do I get?

47% of the young think the government "Definitely should" be responsible for the old.
52% of the middle aged also say "Definitely should". Their parents are in that cohort, if alive.
49% of the oldies say "Definitely should".

What happens when we just move down to "Should" instead of "Definitely should"?

46% of the young, 43% of the middle aged, and 48% of the old say the government "Should" be responsible for the old.

If we add up the "Should" and "Definitely should", we get just about everybody regardless of age wanting the state to take care of old people.

If we add up the "Shouldn't" and "Definitely shouldn't"? 5% of the young, 4% of the middle aged, and 3% of the old fall into that category.

Among the cohort of respondents aged 18-39, 37 of 712 people giving a response said either "Shouldn't" or "Definitely shouldn't".

If there's some incipient revolution against the elderly, I'm not seeing it in the data. But maybe things have changed since 2008.

Every young person who's below the median income will prefer that the state pay for their parents by taking money away from richer people. And a lot of folks would prefer that the government pays for a nursing home (or give the money that can be used to rent a small flat, or help support a reverse mortgage) than that they wind up hosting their parents or inlaws in their own home.

Things will get worse as the effects of the massive burden of transfers to the elderly becomes more apparent. And there's a fantastic case for raising the retirement age. But intergenerational warfare is far from the radar.


  1. We have a problem and that is for sure, Eric, but dudes I am one of the gifted because I will die rather than be a burden, but I can not say this for others.
    New Zealand is in serious trouble about this thing, because only poor old people stay here,sucking the welfare state, and the rest are in Australia.
    And if you read your statistic and think that young people 47% care about their parents, you are dreaming. .... As the truck driver said to me when my dear father died, and my siblings rushed in to grab the goods leaving me the work behind, he said " first the grief and then quickly the greed"
    and so it was even in my own family , my brother wealthy as he is took more and so my sister, and I did the bloody work.
    And now over here in Thailand there is no inter generational warfare, you just pay for you parents and that is that. And that is why the girls are there in Pattya stealing money from idiot Westerners.
    We have a disturbing lack of care of our elderly. Send them away to the old people's farm, visit yearly or sometimes,and wait till dead, collect. Not all New Zealanders are like this just most.

  2. Eric, the question 'Should the government support old people?' is a very different one to 'Should old people get excessively generous (compared to other beneficiaries) non-means-tested super at the age of 65, free public transport including to Waiheke Island, and grotesquely expensive medical treatment, such as heart bypass surgery, near the end of their lives?' Many young people are unaware of the true extent of transfers to old people.

  3. That's all true. But the pub opinion stuff means young folks can never make credible threats of awful stuff to get to a compromise position of reasonable spending.

  4. The question was: "Generally, do you think it should be or should not be the government’s responsibility to provide or ensure a decent living standard for all old people?" - with the word "decent" in there, it's pretty hard to say no to.

    Having said that, I tried running the same numbers as you. In 2008:

    Definitely should

    47.2% (Young)
    51.1% (Mid)
    47.6% (Old)
    In 2011:
    Definitely should41.444.940.3Should46.646.349.3Shouldn't7.95.75
    Certainly looks like a shift...

  5. I'm not saying the numbers make change impossible. Just that they make it awfully hard to make any kind of credible threats like "Oh, if you don't compromise to something reasonable, those crazy Gen Y and Gen X folks will vote away the whole thing, just watch us!"

  6. Who knew it could be so hard to pretend to be insanely reckless in order to force a perfectly reasonable outcome? Heath Ledger made it look so easy...

  7. Nicely done -- I wasn't aware of this survey question. Your post ties in with the point I made that retirees have always depended on the younger generations. I just wonder how that might change as the bill goes up.

  8. Lets not forget that young people will most likely eventually become old people, so in a sense it is in their best interests to support government funded care for the aged. One day they'll need it themselves.

  9. Only where the median voter does better through public transfers than from self-funded investments.

  10. As long as people, if left to their own devices, actually do invest for their future then you are likely correct. However, unless mandated through a scheme such as Kiwi Saver, a lot folk won't save for their future. And then it comes down to a question of ideology. Should a government help out those sufficiently short-sighted, unsophisticated, or unable to save enough for their retirement? My lefty socialist leanings tell me that yes, it should. As the saying goes, a society can be measured by how it treats its weakest members. However I am comfortable with some level of means testing.

  11. Interestingly, the non-working always depend on the working. Sure, they
    have capital, but in reality capital only has value in the absence of
    inflation or default on debts. That is to say, if there are too few
    people working, and too many people trying to live of capital, what
    happens is the returns to capital drop, and the returns to labour

    Ultimately what looks like a financial problem becomes some sort of
    supply demand curve, probably represented through price inflation.

    Or, to put it another way, in a savings based retirement model wage
    inflation benefits the young and disadvantages the old. I think.