Intergenerational Fairness Index - Intergenerational Foundation

Intergenerational Fairness Index

Measuring Changes in Intergenerational Fairness in the United Kingdom

Authors: Jeremy Leach & Angus Hanton Foreword: Professor Laurence J. Kotlikoff 26 June 2012 The Intergenerational Foundation (www.if.org.uk) charity no: 1142230

Contents Foreword by Professor Laurence J. Kotlikoff

3

Executive Summary

4

1. Background

6

2. The Inaugural IF Index

9

3. Understanding Changes in the Index: 1990–2011

11

4. The Component Measures

12

5. How the Index is Created using these Component Measures

28

We would like to thank the following people who have helped in the construction of the Index (but are in no way responsible for any errors which may exist): Tim Lund Tom Ward Tom Emery Harry Segal Gary Frost Antony Mason Liz Emerson Shiv Malik David Parker Andrew McGettigan

© copyright The Intergenerational Foundation

2 Intergenerational Index 2012, The Intergenerational Foundation, if.org.uk

Foreword

Intergenerational inequity is the moral issue of our day. The developed economies have spent the post war era taking vast sums from young and future generations and handing them to the elderly. This redistribution has been a catastrophic success – greatly benefiting successive older generations, including the super rich elderly, but leaving enormous fiscal obligations to today's and tomorrow's children, including super poor children. The unfunded obligations arising from this "take as you go policy" have been kept off the books in accounting practices that would make Enron blush. This systematic Ponzi scheme has now brought the participating countries to the point of fiscal insolvency. It has also fuelled a major rise in national consumption rates at the price of less national saving, domestic investment, and real wage growth. The developed economies have not only engaged in fiscal child abuse and left their children with severely damaged economies, they have also practised educational, health, and environmental child abuse. In combination, these policies are putting an end to every parent's most fervent dream -‐leaving his/her children better off – with better health and education, a cleaner and safer environment, a higher earnings capacity, and a lower tax burden. As the Intergenerational Foundation's vitally important Intergenerational Index makes vividly clear, the UK is failing miserably on each of these counts. The Index can be viewed as an Adults' Report Card, and it shows a failing grade. I applaud the Foundation for providing this critical measure of how we are treating our children. Now it's up to us adults to take the actions needed to reverse the deterioration witnessed by index and to understand that our earthy futures reside in one place only – our children. Laurence J. Kotlikoff Professor of Economics, Boston University Co-‐author of The Clash of Generations (The MIT Press, 2012)

Intergenerational Index 2012, The Intergenerational Foundation, if.org.uk 3

Executive Summary Today's decisions affect younger and future generations. This index is the first attempt systematically to measure the impact that governmental policies have on our children on a year-‐to-‐year basis. What the Index Shows • The IF index of intergenerational unfairness has deteriorated sharply over the last decade. Starting at a level of 100 in the year 2000 the index has risen to a level of 128, based on the latest available data, indicating a much greater burden now being placed on younger people. • The rise has been most pronounced since the financial crisis of 2008 – since then the index has worsened by 6–7 points each year, whereas previously the worsening averaged about 2 points each year. Chart 1. IF Index – 2000 to 2010 (base level of 100 in the year 2000)

• •

Overall between 1990 and 2010 our index shows that unfairness has steadily increased with the index rising from 84 to 128. The IF index highlights that whilst government borrowing and pension debt have increased steadily, there has also been an increased shift in favour of the older generation through higher charges for education, rising youth unemployment and high housing costs.


Why This Matters • The rising level of intergenerational unfairness should matter to everyone. The usual focus on simple measures of inequality between rich and poor misses the important inequalities between generations. What this index highlights is the increasing problem of poorer young people financing richer older people. • A rising index suggests that younger generations will be less inclined to support a status which puts the interest of older generations ahead of their own. They are likely to become disillusioned, and indeed one of our measures tracks the "democratic deficit" in terms of ageing councillors and falling numbers of young people voting. • The rising index is putting the social contract between the generations at risk. How We've Constructed the IF Index • We've taken nine indicators that most affect our lives – including housing, government debt, the pensions burden, the environment – and put them together to create a measure of how things have changed over recent years. Not all the indicators have got worse – some, such as UK carbon emissions, have been improving. • All the data series go back to 1990 and together they measure how things have changed over the last 20 years. We have been careful to exclude the effects of inflation by using a GDP deflator and we have excluded the effect of population growth by looking at the numbers on a per head basis. All figures are taken from official sources and this report gives the reasoning behind the choice of indicators and the methodology used, and we include the precise sources of the data. • We plan to publish annual figures for the index and each year we will track how things get better or worse for younger generations. • These measures also provide a basis on which intergenerational fairness could be measured across different countries.


SECTION 1. Background • • •

•

The Intergenerational Fairness Index which has been created by the Intergenerational Foundation (if.org.uk) is an expression of how fairness across the generations is changing over time. It works by using quantitative data (that is openly available to all) that cover some of the most important aspects of our society (eg housing, employment etc). We have attempted to make use of data series which go as far back in time as possible so that we can build up an historic picture of how these component measures are evolving. Each of the component data series that we have used can be expected to be updated on an annual basis so that we can continue to track them into the future. We have also attempted to make use of data series that can be compared between countries. In the future, therefore, we plan to make objective comparisons between the UK and other countries. The Index is meant to be as open to scrutiny (and improvement!) as possible. All of the data that we have used are outlined in detail below and we also explain fully how the Index has been created from the component data. We are completely open to: -

•

•

•

Using higher quality data sources if these are available. Including other areas in the Index. Rectifying any errors that we have made.

Our initial Index is made up of data from the following 9 content areas: - Unemployment - Housing - Pensions - Government Debt - Participation in Democracy - Health - Income - Environmental Impact - Education The Index makes use of 2 different types of component data: - Data which indicate the degree to which younger people in our society are at an advantage or disadvantage compared to the societal average. - The degree to which future generations (those who are not yet born) will be impacted by the ways in which we live our lives today or by government actions (ie how much they may be advantaged or disadvantaged by the actions of those alive today). An increase in the Index indicates a worsening position for younger people in our society


•

The table below outlines which type of data is being used for each of the content areas. Content Area 1. Unemployment 2. Housing. Measure A – Affordability 2. Housing. Measure B – Costs 2. Housing. Measure C – Housebuilding

Younger Persons Comparison Unemployment amongst younger people compared to UK average. House price affordability compared to income levels of young people. Housing costs as a % of disposable income.

3. Pensions. Measure A – State Pension

3. Pensions. Measure B – Unfunded Public Sector Pensions

4. Government Debt

5. Participation in Democracy. Measure A – Age of Councillors 5. Participation in Democracy. Measure B – Voting 6. Health 7. Income

Average age of Councillors in England & Wales.

8. Environmental Impact. Measure A – UK GHG Emissions 8. Environmental Impact.. Measure B – CO2 Levels 9. Education. Measure A – Levels of Spend 9. Education. Measure B – Tuition Fees 9. Education. Measure C – GCSE Pass Rate

Future Generations

Numbers of houses built as a proportion of number of households. Cost of state pension payments per person in the UK workforce. Cost of unfunded public sector occupational pensions per person in the UK workforce. Public sector debt per person in the UK workforce.

Participation in voting in General Elections by younger people.

Under 60s usage of selected health services. Comparison of the income levels of young people to the UK average.

Levels of CO2 in the atmosphere.

Spend on Education as a proportion of GDP. Average tuition fee liability of students in Higher Education. % of School Leavers of Any Age Achieving 5 or more A*–C Equivalent Pass Grades.

UK Greenhouse Gas emissions.


•

•

•

• •

We have attempted to ensure that there is no element of double counting. This is particularly problematic in relation to government debt where there is a danger that the costs of large elements overlap, such as the State Pension and Unfunded Public Sector Occupation Pensions, which are already included in our Pensions measure. As far as is possible, therefore, the costs of these two elements are omitted from the calculations of government debt. It has not been possible to define the young in the same way across the sets of data which are available but we do not believe that the differences would materially affect our results. The age groupings that have been used do not allow direct comparison across the data sets. For that reason, we made the decisions about the definition of the young based on what appears most appropriate with the data that are available for that component measure. Some potential obvious component measures have been omitted where we have not been able to identify a suitable data source for that measure. For example we have not successfully located a measure for the proportion of the population over time which holds a degree. Also component measures have been omitted where other factors are so dominant that they skew the picture for that measure. A good example of this is attempting to locate a measure for inherited wealth where the data are skewed so heavily by the increase in value of housing over the past 20 years, an element which has already been addressed through the housing measures. We remain very open to inclusion of other data sources if appropriate measures are proposed. On the following pages we will look at how the data for each of the 9 component content areas have been gathered and included in the Index. Finally we end by describing the process by which the different data sources have then been combined into the Intergenerational Index.


SECTION 2. The Inaugural IF Index • The IF Index sets its base at 100 in the year 2000. We have taken the Index back to 1990 in order to provide historical context for its movements. Most of the component measures that we have employed have data that go back to 1990. Data for some measures, however, do go back far further and we have included all of the data that we have when we examine the component measures in Section 4 below. The table below indicates how the different sets of data have been introduced. Year Component Measures From 1990 Unemployment, Pensions (Measure A – State Pension Costs), Government Debt, Democracy (Measure B –Participation in Voting), Environmental Impact (both Measures), Education (Measure A – Levels of Spend; Measure C – GCSE Pass Rate), Housing (Measure C –Housebuilding). From 1991 Pensions (Measure B – Unfunded Public Sector Occupational Pensions). From 1995 Housing (Measure B – Costs). From 1997 Democracy (Measure A – Average Age of Councillors). From 1999 Housing, Health, Income, Education (Measure B – HE Tuition Fees). • The Index is structured such that if the Index figure rises, it demonstrates that intergenerational fairness is declining and if it falls it shows that there is increasing parity between the lot of younger generations and society more generally. In all of the component measures with the exception of Education (Component A – Levels of Spend), an increase in the level of the component measure represents a decline in intergenerational fairness. In creating the index value for Education (Component A – Levels of Spend), therefore, an adjustment has been made to ensure that the rise in this component measure reduces rather than increases intergenerational unfairness. • Three of the component measures, Pensions (Component B – Unfunded Public Sector Occupational Pensions), Education (Component B – HE Tuition Fees) and Government Debt, make use of source data that have not taken inflation or changes to GDP into account; as a result, the source data have been adjusted by the latest GDP deflator data (www.hm-‐treasury.gov.uk/d/gdp_deflators.xls).


• The initial IF Index results are as follows: Year Index Year on Year Change 1990 84 1991 85 1 1992 88 3 1993 91 3 1994 93 2 1995 96 3 1996 98 2 1997 99 1 1998 101 2 1999 99 (2) 2000 100 1 2001 101 1 2002 103 2 2003 106 3 2004 108 2 2005 111 3 2006 113 2 2007 116 3 2008 115 1 2009 121 6 2010 128 7 Chart 2. IF Index – 1990 to 2010 with a base level of 100 in the year 2000


SECTION 3. Understanding Changes in the Index: 1990–2011 So what are the significant factors that have caused the IF Index to move from a level of 84 in 1990 to its current figure of 128? A. 1990 to 1995 – IF Index rose from 84 to 96. • The increase in the index in this initial period is principally driven by sharp rises in the value of unfunded liabilities for public sector occupational pensions as well as increases in the value of government debt. At the same time levels of unemployment amongst younger people continued to increase in comparison to the national average and there was a small but steady increase in the costs of the liabilities for the state pension amongst working people. • Offsetting these increases were the benefits of rising spending on education as a percentage of GDP and a steady decline in the UK's emissions of greenhouse gases. B. 1995 to 2000 – IF Index rose from 96 to 100. • This was a period of the smallest rise in the Index with very little growth between 1996 and 2001. Although the value of unfunded liabilities for public sector occupational pensions continued to rise along with the gap between levels of unemployment for young people and the national average, their effects were balanced by a decline in overall levels of government debt a continued rise in spending on education. C. 2000 to 2005 – IF Index rose from 100 to 111. • Four principal factors lie behind the increase in the index that occurred in the early years of the new century. The most significant were the increases which occurred in the value of government debt and unfunded liabilities for public sector occupational pensions. Youth unemployment also rose. • The introduction of the measure to assess housing affordability amongst younger people also contributed significantly to the overall rise in the index as median house prices doubled in value compared to median income levels amongst younger people over this five-‐year period. D. 2005 to 2011 – IF Index rose from 111 to 128. • Some factors have improved intergenerational fairness in the past five years. These include a modest decline in house prices (mostly outside the southeast of England), continuing increase in levels of spend on education and a continuing gradual fall in the level of UK greenhouse gas emissions. • These, however, have been outweighed by significant increases in other areas. Most striking are the sharp rises in the value of government debt and the costs of unfunded liabilities for public sector occupational pensions. In addition, increases in levels of tuition fees for students in Higher Education have also contributed to the Index’s sharp rise in 2009 and 2010. Intergenerational Index 2012, The Intergenerational Foundation, if.org.uk 11

SECTION 4. The Component Measures

1. Unemployment Purpose of Measure Measurement Data Sources

To assess levels of unemployment amongst younger people compared to the UK average. The ratio compares the proportion aged under 25 who are unemployed to the average level of unemployment in the UK. Eurostat: http://epp.eurostat.ec.europa.eu (comparing UK unemployment rate (%), annual average, for those aged under 25 to total unemployment rate). 1983 onwards

Length of data Chart 3. Proportion (%) of those aged under 25 (red line) who are unemployed compared to total UK unemployment (blue line) – 1983 onwards

Resulting Ratio of Youth unemployment – proportion of those aged 25 who are unemployed divided by the average UK level of unemployment 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996

1.83 1.72 1.61 1.59 1.48 1.44 1.41 1.51 1.62 1.66 1.72 1.76 1.80 1.89

1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010


2.01 2.15 2.15 2.26 2.34 2.35 2.44 2.57 2.67 2.59 2.70 2.68 2.51 2.51

2. Housing. Measure A – Affordability Purpose of Measure Measurement Data Sources

Length of data

To assess levels of affordability of UK housing amongst younger people. The ratio compares the median levels of income amongst those aged 20 to 29 (22 to 29 from 2008 onwards) to median house price values in England and Wales. 1. House Prices: Land Registry http://www.communities.gov.uk/ documents/housing/xls/141395.xls 2. Income Data: http://www.hmrc.gov.uk/stats/ income_distribution/menu-‐by-‐year.htm 1. House Prices: 1996 onwards 2. Income Data: 1999–2000 onwards

Chart 4. Median Income of those aged 20 to 29 (£000s) (red line) compared to median house prices (£000s) (blue line)

Resulting Ratio of House Price Affordability – Ratio of median house prices to median income levels of those aged 20 to 29 Year

Ratio

1999 2000 2001 2002 2003 2004

5.75 6.05 6.37 7.70 9.07 10.23

Year

Ratio

2005 2006 2007 2008 2009 2010

10.36 10.69 10.90 9.12 8.78 9.75


2. Housing. Measure B – Housing Costs Purpose of Measure Measurement Data Sources

To assess the proportion of disposable income which is spent on housing costs. The ratio expresses housing costs as a proportion of disposable income. 1. ONS Family Expenditure Survey. www.ons.gov.uk/ons/rel/family-‐spending/family-‐ spending/family-‐spending-‐2011-‐edition/table-‐4-‐1-‐-‐-‐final-‐-‐-‐ 2010.xls 1995 onwards

Length of data Chart 5. Housing Costs as a Proportion of Disposable Income, 1995 to 2010

Housing Cost & Disposable Income, 1995 to 2010

Year

1995 1996 1997 1998 1999 2000 2001 2002

Housing Costs (£pw)

Household Disposable income (£pw)

Housing as % of Disposable Income

72.50 71.20 72.50 78.00 76.70 83.40 84.70 84.00

467 480 492 506 526 534 569 571

15.5% 14.8% 14.7% 15.4% 14.6% 15.6% 14.9% 14.7%

Year

2003 2004 2005 2006 2007 2008 2009 2010

Housing Costs (£pw)

Household Disposable income (£pw)

Housing as % of Disposable Income

85.60 91.20 93.60 93.90 99.60 97.80 89.20 85.40

569 581 579 582 578 606 584 578

15.1% 15.7% 16.2% 16.1% 17.2% 16.2% 15.3% 14.8%


2. Housing. Measure C – Housebuilding Purpose of Measure Measurement

To provide a measure of levels of housebuilding in relation to the need for new homes. The ratio expresses the numbers of houses built as a proportion of the number of households. A decrease indicates a reduction in intergenerational fairness. This has been taken into account when this data is introduced into the index itself. 1. Housebuilding. To 1980: http://books.google.co.uk/books?id=Oyg9AAAAIAAJ&pg= PA382&source=gbs_toc_r&cad=4#v=onepage&q&f=false 1980 onwards: http://www.communities.gov.uk/housing/ housingresearch/housingstatistics/housingstatisticsby/housebuilding/livetables/ 2. Households: Various based on ONS and Census data

Data Sources

Length -‐ data 1900 onwards Chart 6. Number of Houses Built in GB since 1900 as a percentage of the No. of Households

Total Number of Houses Built Per Year 1990 to 2010 (in ’000s)

1900

139.7

1920

29.7

1940

95.1

1960

297.8

1980

233.7

2000

165.4

1901

139.7

1921

76.1

1941

23.4

1961

296.1

1981

199.8

2001

160.4

1902

153.8

1922

84.5

1942

12.9

1962

305.4

1982

175.8

2002

168.1

1903

156.9

1923

66.1

1943

9.5

1963

298.9

1983

199.3

2003

176.0

1904

136.6

1924

131.2

1944

8.1

1964

373.7

1984

210.0

2004

187.9

1905

127.4

1925

174.2

1945

13.8

1965

382.3

1985

196.7

2005

192.5

1906

130.6

1926

222.3

1946

138.5

1966

385.5

1986

206.4

2006

194.8

1907

121.3

1927

254.9

1947

186.0

1967

404.4

1987

216.5

2007

210.8

1908

100.9

1928

206.8

1948

245.9

1968

413.7

1988

232.4

2008

172.2

1909

98.8

1929

212.2

1949

197.7

1969

366.8

1989

211.2

2009

143.3

1910

86.0

1930

202.4

1950

198.2

1970

350.4

1990

195.3

2010

125.8

1911

67.5

1931

210.0

1951

194.8

1971

350.6

1991

184.5

1912

53.4

1932

218.1

1952

239.9

1972

319.3

1992

172.0

1913

54.2

1933

275.2

1953

318.8

1973

294.1

1993

178.9

1914

48.3

1934

336.7

1954

347.8

1974

269.5

1994

187.0

1915

30.8

1935

350.5

1955

317.4

1975

313.0

1995

191.5

1916

17.0

1936

365.0

1956

300.6

1976

315.2

1996

180.7

1917

N/A

1937

362.2

1957

300.1

1977

303.3

1997

180.9

1918

N/A

1938

359.1

1958

273.7

1978

279.8

1998

171.0

1919

N/A

1939

255.6

1959

276.7

1979

244.4

1999

172.5


3. Pensions. Measure A – State Pension Costs Purpose of Measure

To assess the changing cost of the state pension in relation to the size of the UK workforce. The measure of the UK workforce is used as it will be those who are currently in that force who will be paying for its costs. The ratio divides the total cost of the state pension by the numbers in the UK workforce. 1. State Pension Costs research.dwp.gov.uk/asd/asd4/alltables_winter2010.xls 2. Workforce Size: OECD http://stats.oecd.org Annual Labour Force Statistics – Total Employment 1. State Pension Costs: 1948 onwards 2. Workforce Size: 1984/85 onwards

Measurement Data Sources

Length of data

Chart 7. Size of the UK employed workforce (millions) (green line) compared to total cost of state pension (£ billions – real terms, 2011/12 Prices (blue line)

Resulting State Pension Cost for each working person (£ – real terms, 2011/12 prices) Year

1984 1985 1986 1987 1988 1989 1990 1991 1992

£

1,596 1,619 1,665 1,632 1,522 1,477 1,489 1,623 1,684

Year

1993 1994 1995 1996 1997 1998 1999 2000 2001

£

1,754 1,751 1,756 1,791 1,802 1,854 1,908 1,905 1,999

Year

2002 2003 2004 2005 2006 2007 2008 2009 2010


£

2,038 2,058 2,087 2,146 2,155 2,242 2,250 2,457 2,481

3. Pensions. Measure B – Unfunded Public Sector Pension Costs Purpose of To assess the changing cost of unfunded public sector pensions in relation to the Measure size of the UK workforce. Measurement The ratio divides the total cost of the unfunded liabilities of UK Public Sector Occupational Pensions by the numbers in the UK workforce. Data Sources 1. Public Sector Occupational Pensions Liabilities (adjusted using GDP Deflator). Data from 1991 to 1998: http://www.geog.ox.ac.uk/news/events/phclcs/Clark.pdf Data from 1999 to 2001: http://www.iea.org.uk/sites/default/files/ publications/files/upldbook329pdf.pdf Data from 2002 to 2008: ONS Pension Trends Chapter 14. Data for 2010: Estimates from http://www.public-‐sector-‐pensions-‐ commission.org.uk/wp-‐content/themes/pspc/images/Public-‐Sector-‐Pensions-‐ Commission-‐Report.pdf 2. Workforce Size: OECD http://stats.oecd.org (As Measure A) Length of 1. Public Sector Occupational Pensions Liabilities: 1991 onwards data 2. Workforce Size: 1984/85 onwards Chart 8. Cost of unfunded liabilities of UK Public Sector Occupational Pensions (£ billions – real terms, 2011/12 prices)

Resulting liabilities for unfunded liabilities of UK Public Sector Occupational Pensions per person in the workforce (£ billions – real terms, 2011/12 prices) Year 1991 1992 1993 1994 1995 1996 1997

£ 10,224 11,832 13,441 13,652 13,863 14,073 14,284

Year 1998 1999 2000 2001 2002 2003 2004

£ 14,496 14,770 15,421 15,980 16,830 18,215 19,106

Year 2005 2006 2007 2008 2009 2010

£ 21,525 25,293 30,720 27,315 31,111 34,907


4. Government Debt Purpose of Measure Measurement Data Sources

Length of data

To assess level of public debt per employed person. The ratio divides the total value of public debt of the UK government (excl. state pension and Unfunded Public Sector Occupation Pensions) by the numbers in the UK workforce 1. Level of Public Debt (adjusted using GDP Deflator): http://www.hm-‐treasury.gov.uk/d/ public_finances_databank.xls Worksheet A5 2. Workforce Size: OECD http://stats.oecd.org (As Pensions Measure A) 1. Level of Public Debt: 1974/75 onwards 2. Workforce Size: 1984/85 onwards

Chart 9. Levels of Government Debt (public sector net debt, £ Billions)

Resulting level of Government Debt per person in the workforce (£/person) 1984 1985 1986 1987 1988 1989 1990 1991 1992

15,402 14,882 14,750 13,747 11,415 10,181 9,307 9,896 11,957

1993 1994 1995 1996 1997 1998 1999 2000 2001

14,603 16,592 17,734 18,272 17,745 17,281 16,435 14,596 14,351


2002 2003 2004 2005 2006 2007 2008 2009 2010

15,311 16,380 17,498 18,638 19,347 19,963 21,519 27,078 31,278

5. Participation in Democracy. Measure A – Age of Councillors Purpose of Measure

To assess the age of Councillors (excluding Town and Parish Councillors) as a guide as to the ages of those who make significant decisions about the places in which we live. The average age of Councillors over time. Regular (but not annual) research by the Local Government Association): http://www.lga.gov.uk/lga/core/page.do?pageId=1165045 LGA Research: 1997 onwards

Measurement Data Sources

Length of data Average Age of Councillors (excluding Town and Parish Councillors) based on the years that the LGA has undertaken its research 1997 2001 2004 2006 2008 2010

55.4 56.9 57.8 58.3 58.8 59.7


5. Participation in Democracy. Measure B – Voting Purpose of Measure Measurement Data Sources

To compare levels of participation in voting at General Elections amongst younger people with the population average. Comparing the proportion of those aged 25 to 34 who have voted in General Elections to the population average. 1. 1964 to 2005 British Election Survey http://www.essex.ac.uk/bes/ Papers/ec%20report%20final.pdf 2. 2010 Election http://www.ipsos-‐mori.com/ researchpublications/researcharchive/2613/How-‐Britain-‐ Voted-‐in-‐2010.aspx?view=wide General Elections: 1964 onwards

Length of data Chart 10. Proportion of the UK population voting in General Elections 1964 onwards (blue line) compared to the proportion of those aged 25 to 34 who voted (red line)

Resulting Ratio of Participation amongst Younger People. The proportion of all UK adults voting in general elections since 1964 divided by the proportion of those aged 25 to 34 who voted. 1964 1966 1970 1974-‐Feb 1974-‐Oct 1979 1983

1.10 1.06 1.08 1.02 1.05 1.05 1.08

1987 1992 1997 2001 2005 2010

1.01 1.00 1.16 1.27 1.34 1.18


6. Health Purpose of Measure Measurement Data Sources

To compare usage of selected medical services amongst younger people (for purposes of this measurement, those aged under 60). To compare the usage of inpatient treatments and operations and other procedures by those aged under 60 with the total numbers carried out. Hospital Episode Statistics: http://www.hesonline.nhs.uk/Ease/servlet/ ContentServer?siteID=1937&categoryID=889 1990 onwards

Length of data Chart 11. Proportion of inpatient treatments and operations and other procedures undertaken amongst those aged under 60

Total numbers of inpatient treatments and operations and other procedures comparing the numbers undertaken amongst those aged 60 and over with those undertaken amongst those aged under 60 Year

Undertaken with Those Aged Under 60 15,016,083

Total Undertaken

Year

1999

Undertaken with Those Aged 60 & Over 9,510,439

24,526,522

2000

10,026,240

14,858,850

24,885,090

2001

10,155,575

14,806,529

24,962,104

2002

10,857,895

15,556,047

2003

11,322,576

15,793,264

2004

11,790,156

16,245,326

Undertaken with Those Aged Under 60 17,168,272

Total Undertaken

2005

Undertaken with Those Aged 60 & Over 12,484,130

2006

13,766,107

18,238,628

32,004,735

2007

15,629,627

19,739,912

35,369,539

26,413,942

2008

17,702,045

21,031,217

38,733,262

27,115,840

2009

19,164,097

22,158,302

41,322,399

28,035,482

2010

20,214,006

22,964,688

43,178,694


29,652,402

7. Income Purpose of Measure Measurement Data Sources

To compare median income levels amongst the young to the population average (amongst those in employment). Comparing the median income levels of the young (20 to 29 (22 to 29 from 2008 onwards)) to the population average. HMRC Data: http://www.hmrc.gov.uk/stats/ income_distribution/menu-‐by-‐year.htm 1999 onwards

Length of data Chart 12. Median annual income (£) of all in employment in the UK (blue line) compared to the median annual income of those aged 20 to 29 (red line)

Resulting ratio describing the relationship of the median level of all those in employment to the median income of younger workers (Median income of all in employment divided by that of those aged under 30) Year 1999 2000 2001 2002 2003 2004

Ratio 1.15 1.12 1.10 1.11 1.13 1.12

Year 2005 2006 2007 2008 2009 2010

Ratio 1.13 1.14 1.14 1.11 1.12 1.13


8. Environmental Impact. Measure A – UK Greenhouse Gas Emissions Purpose of Measure Measurement Data Sources

To describe the environmental impact of UK energy consumption. UK emissions of Greenhouse Gases. http://www.decc.gov.uk/en/content/cms/statistics/climate_stats/ gg_emissions/uk_emissions/2010_final/2010_final.aspx 1990 onwards

Length of data Chart 13. UK Greenhouse gas emissions, weighted by global warming potential (million tonnes carbon dioxide equivalent)

UK Greenhouse gas emissions, weighted by global warming potential (million tonnes carbon dioxide equivalent) 1990

766.4

2001

676.4

1991

773.3

2002

655.7

1992

750.3

2003

660.1

1993

729.1

2004

659.9

1994

717.4

2005

654.7

1995

708.4

2006

650.3

1996

729.3

2007

640.9

1997

703.4

2008

626.7

1998

700.6

2009

572.5

1999

669.6

2010

590.4

2000

671.5


8. Environmental Impact. Measure B – CO2 in the Atmosphere Purpose of Measure Measurement Data Sources

To describe the impact of climate change. CO2 levels – parts per million US Dept of Commerce –-‐ National Oceanic & Atmospheric Administration – Earth System Research Laboratory ftp://ftp.cmdl.noaa.gov/ccg/co2/trends/co2_annmean_mlo.txt 1959 onwards

Length of data Chart 14. CO2 expressed as a mole fraction (number of molecules) in dry air, micromol/mol, abbreviated as ppm

Base Data – CO2 expressed as a mole fraction in dry air, micromol/mol, abbreviated as ppm 1959

315.97

1971

326.32

1981

340.10

1991

355.57

2001

371.13

1960

316.91

1972

327.45

1982

341.44

1992

356.38

2002

373.22

1961

317.64

1973

329.68

1983

343.03

1993

357.07

2003

375.77

1962

318.45

1974

330.18

1984

344.58

1994

358.82

2004

377.49

1963

318.99

1975

331.08

1985

346.04

1995

360.80

2005

379.80

1964

319.62

1976

332.05

1986

347.39

1996

362.59

2006

381.90

1965

320.04

1977

333.78

1987

349.16

1997

363.71

2007

383.76

1966

321.38

1978

335.41

1988

351.56

1998

366.65

2008

385.59

1967

322.16

1979

336.78

1989

353.07

1999

368.33

2009

387.38

1968

323.04

1980

338.68

1990

354.35

2000

369.52

2010

389.78

1969

324.62

1970

325.68


9. Education. Measure A – Level of Spend on Education Purpose of Measure Measurement

To describe spend on education over time. Spend on education as a proportion of GDP. An increase indicates an improvement in intergenerational fairness. This has been taken into account when the data are introduced into the index itself. UK Central Government and Local Authority Public Spending: http://www.ukpublicspending.co.uk/downchart_ukgs.php?chart=20-‐ total&year=1900_2011&units=p&state=UK 1900 onwards

Data Sources

Length of data Chart 15. Spend on Education as a % of GDP

1900 1901 1902 1903 1904 1905 1906 1907 1908 1909 1910 1911 1912 1913 1914 1915 1916 1917 1918 1919 1920 1921 1922 1923 1924 1925

1.36 1.42 1.49 1.69 1.89 2.22 2.25 2.27 2.46 2.49 2.46 2.45 2.40 2.39 2.41 2.06 1.64 1.35 1.34 1.36 1.84 2.99 3.52 3.21 3.07 3.01

1926 1927 1928 1929 1930 1931 1932 1933 1934 1935 1936 1937 1938 1939 1940 1941 1942 1943 1944 1945 1946 1947 1948 1949 1950

3.20 3.18 3.29 3.21 3.33 3.81 3.87 3.56 3.35 3.34 3.38 3.31 3.36 3.26 2.67 2.14 1.99 2.06 2.15 2.35 3.01 3.36 3.60 3.96 4.23

1951 1952 1953 1954 1955 1956 1957 1958 1959 1960 1961 1962 1963 1964 1965 1966 1967 1968 1969 1970 1971 1972 1973 1974 1975

3.28 3.37 3.30 3.34 3.38 3.63 3.86 3.93 3.99 4.06 4.03 4.43 4.56 4.61 4.77 5.00 5.30 5.35 5.33 5.39 5.48 5.52 5.58 5.78 6.51

1976 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000

6.14 5.64 5.33 5.09 5.33 5.41 5.27 4.88 4.79 4.53 4.37 4.36 4.26 4.19 4.31 4.43 4.71 5.00 4.97 4.92 4.67 4.49 4.45 4.37 4.37

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

4.55 4.75 4.80 5.07 5.19 5.26 5.22 5.40 5.96 6.09


9. Education. Measure B –Tuition Fees (Higher Education) Purpose of Measure Measurement Data Sources

To describe the costs of tuition fees for students in Higher Education (excluding Scotland). Average tuition fee liability of students in Higher Education (adjusted using GDP Deflator). House of Commons Briefing Paper on Tuition Fees dated 29th November 2011: www.parliament.uk/briefing-‐papers/SN00917.pdf 1998/99 onwards

Length of data Chart 16. Average tuition fee liability of students in Higher Education (£ per academic year)

Academic Year 1998/99 1999/00 2000/01 2001/02 2002/03 2003/04 2004/05 2005/06 2006/07 2007/08 2008/09 2009/10

Average private contribution to fees (£) £ 410 £ 475 £ 540 £ 545 £ 590 £ 585 £ 590 £ 615 £ 680 £ 725 £ 790 £ 1,025


9. Education. Measure C – GCSE Pass Rate Purpose of Measure Measurement

Data Sources

To assess educational performance over time. Proportion of students achieving 5 or more A* to C equivalent pass grades at GCSE in England. An increase indicates an improvement in intergenerational fairness. That has been taken into account when the data are introduced into the index itself. http://www.education.gov.uk/cgi-‐ bin/rsgateway/search.pl?keyw=066&q2=Search 1974 onwards

Length of data Chart 17. Proportion of Students Achieving 5 or more A* to C Pass Grades at GCSE/Equivalent in England 1974–2010

Base Data – Proportion of Students Achieving 5 or more A* to C Pass Grades at GCSE/Equivalent in England 1974–2010

Year % Year % Year % 1974 22.6 1987 29.9 1999 49.2 1975 22.9 1988 32.8 2000 50.0 1976 23.5 1989 34.5 2001 51.2 1977 23.7 1990 36.8 2002 52.6 1978 23.7 1991 38.3 2003 53.4 1979 24.0 1992 41.2 2004 55.7 1980 25.0 1993 43.3 2005 59.0 1981 26.1 1994 43.5 2006 61.5 1982 26.2 1995 44.5 2007 64.6 1983 26.7 1996 45.1 2008 69.7 1984 26.9 1997 46.3 2009 74.8 1985 26.7 1998 47.9 2010 78.8 1986 26.4 Note: These figures arguably paint too optimistic a picture as grade inflation may mean that educational performance is overstated.


SECTION 5. How the Index is Created using these Component Measures •

• •

• •

The Index has been created by taking each of our nine core content areas, setting the values for them in the year 2000 at an index figure of 100 and expressing them in terms of the percentage variation from that level in the year 2000. We have gone back in time as far as 1990 and forward in time to 2011 for as many of the measures as possible. Where a content area contains two or more component measures, the average of variation of these component measures has been used. This has been done in order not to give undue weight to any particular content area. Once the level of variation of each of the content areas has been identified, the unweighted arithmetic average of the changes across the nine content areas has been worked out and the overall IF Index figure is an expression of that change forward in time and backwards in time from the base figure of 100 in the year 2000. As we have already noted, an increase in the index represents an increase in intergenerational unfairness. The table below shows the variation for each of the content areas from the level of 100 in the year 2000 and the resulting IF Index figure for each year. 1. Unem-‐ ploy-‐ ment

7. Income

8. Environ-‐ mental Impact

2. Housing

9. Edu-‐ cation

IF INDEX

1990

67

1991

72

105

119

84

106

115

85

1992 1993

81

104

107

88

83

103

101

91

114

86

102

101

93

122

88

102

101

96

93

125

91

103

102

98

94

122

96

102

103

99

97

96

118

97

102

101

101

95

98

113

99

96

103

100

97

99

100

100

100

100

100

100

100

100

100

100

2001

104

101

104

98

101

101

98

101

102

101

2002

104

106

108

105

102

102

99

99

100

103

2003

108

103

113

112

103

104

101

100

101

106

2004

114

119

117

120

104

104

100

100

97

108

2005

118

120

126

128

105

104

101

100

94

111

2006

115

122

139

133

104

107

102

100

93

113

2007

119

123

158

137

103

110

102

100

95

116

2008

119

117

148

147

102

113

99

99

94

115

2009

111

120

165

186

101

115

101

95

92

121

2010

111

130

178

214

100

116

102

97

103

128

3. Pensions

4. Govt Debt

5. Demo-‐ cracy

6. Health

76

78

64

81

81

76

68

81

74

88

83

82

76

86

90

100

1994

78

83

90

1995

80

91

91

1996

83

91

1997

89

92

1998

95

1999

95

2000


Chart 18. IF Index and the Nine Content Areas – 2000 to 2010 (from the Index base of 100 in the year 2000)
