Ageing and the economic life cycle: The National Transfer Accounts approach.

OBJECTIVE: To illustrate the use of National Transfer Accounts (NTA) for understanding ageing and the economic life cycle in Australia.

METHODS: The NTA methodology is applied utilising a range of unit record, demographic and administrative data sets from 1981 to 2010.

RESULTS: During early and later life, total consumption (public and private) is greater than labour income. On a time series and cohort basis, we show that each successive generation has improved their level of well-being (as measured by consumption) relative to the previous years or previous cohorts from 1981 to 1982 onwards. We also show a substantial increase in labour income earned by mature age workers over this period. International comparisons show Australia to have consumption and labour income age profiles very similar to those of Canada but dissimilar to many other countries, driven by differences in demographic and policy settings.

CONCLUSION: The NTA approach provides a powerful framework to track differences in the economic life cycle across age groups, across time, across cohorts and across countries.