The Development of Public Transfers in the United States: Historical Generational Accounts for Education, Social Security, and Medicare

Antoine Bommier, Université Toulouse 1 Sciences Sociales
Ronald Lee, University of California, Berkeley
Tim Miller, University of California, Berkeley

We develop generational accounts for the major public sector transfers for cohorts born since 1850. Generational accounts give the difference between what an average member of a birth cohort receives over its life cycle from the government, and what it pays in taxes, suitably discounted and weighted by survival. We estimate such accounts for public education, Social Security, and Medicare. The purpose is partly descriptive, to trace the evolution of public transfers in the US, and describe how this evolution affected different cohorts. But going beyond simple description, these estimates gain interest from a vigorous theoretical debate in the economics literature on the link between education, social security, and economic growth, a debate that we review in the first section of this paper. This section also states some new theorems pertaining to the theories.