Seminar 16: Intergenerational Justice
Prof. Christian Keuschnigg, FGN-HSG
Course outline and reading list
This version: August 16, 2011, Downloads on: www.fgn.unisg.ch/keuschnigg
Chair: Dieter Birnbacher, Professor of Philosophy, Heinrich-Heine University of Düsseldorf
Chair: Christian Keuschnigg, Professor of Economics, FGN-HSG, University of St. Gallen
Abstract: The increasing capacities of man to change the living conditions of future
generations and the increasing capacity to foresee these changes have resulted in an expansion
of the temporal dimension of political responsibility. At the same time, it raises a number of
complex and controversial ethical questions: Are we justified in taking future dangers less
seriously because of their temporal distance? Is it only fair not to make provisions for later
generations at the cost of the present generation given that economic growth and
technological progress will make later generations more comfortable anyway?
The seminar discusses the sources of intergenerational inequalities and alternative ways of
distributing resources and wealth across generations for greater intergenerational fairness. A
fair intergenerational distribution of limited resources requires economic mechanisms that
shift resources from lucky towards unlucky generations. The seminar links this discussion,
among others, to current problems of fiscal sustainability, environmental sustainability and of
ageing and imbalances in the pension system. It also discusses how the exceptional costs of
large scale natural disasters (earthquakes) or financial and economic crises are spread out over
present and future generations via public and private debt and also via private bequests.
Time: August 19-24, 2-5 p.m., except Sunday, August 21, 3-6 p.m.
Venue: Hauptschule Alpbach
Language: English
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Overview:
1. Welfare Economics of Redistribution
 Welfare comparisons, equity efficiency trade-off
 Redistribution within and between generations
2. Equity and Redistribution Within Generations
 Tax transfer mechanism, incentives of tax payers and welfare recipients
 equity efficiency trade-off, taxing the rich, giving to the poor
3. Equity and Redistribution Between Generations
 Intergenerational altruism and selfishness
 Bequest motives, intergenerational resource allocation
4. Government Debt and Intergenerational Redistribution
 Mechanics of public debt, long-run sustainability, solvency gap
 Debt and intergenerational redistribution, debt neutrality theorem, crowding out
5. Aging, Pension Reform and Intergenerational Redistribution
 Aging, dependency ratios, insuring old age income via pension system
 Pension reform and intergenerational redistribution
6. Taxation and Intergenerational Redistribution
 Bequest taxation and intergenerational redistribution
 Tax reform, economic growth, and intergenerational effects
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References
Welfare Economics of Redistribution
 Sen, Amartya (2000), Social Justice and the Distribution of Income, in: A. B. Atkinson
and F. Bourguignon (eds.), Handbook of Income Redistribution, Vol. I, Amsterdam:
Elsevier, 59-85.
 Boadway, Robin and Michael Keen (2000), Redistribution, in: A. B. Atkinson and F.
Bourguignon (eds.), Handbook of Income Redistribution, Vol. I, Amsterdam: Elsevier,
677-789.
Equity and Redistribution Within Generations
 Brewer, Mike, Emmanuel Saez, and Andrew Shephard (2010), Means-Testing and Tax
Rates on Earnings, in: James Mirrlees et al. (eds.), Dimensions of Tax Design. The
Mirrlees Review, Oxford University Press, 90-201.
Equity and Redistribution Between Generations
 Kotlikoff, Laurence J. (2002), Generational Policy, in: A. J. Auerbach and M. S. Feldstein
(eds.), Handbook of Public Economics, Vol. 4, Amsterdam: North-Holland, 1873-1932.
Government Debt and Intergenerational Redistribution
 Elmendorf, Douglas W. and Gregory N. Mankiw (1999), Government Debt, in: J. B.
Taylor and M. Woodford (eds.), Handbook of Macroeconomics, Vol. 1C, Amsterdam:
Elsevier, 1615-1669.
Aging, Pension Reform and Intergenerational Redistribution
 Lindbeck, Assar and Mats Persson (2003), The Gains from Pension Reform, in: Journal of
Economic Literature 41, 74-112.
Taxation and Intergenerational Redistribution
 Boadway, Robin, Emma Chamberlain, and Carl Emmerson (2010), Taxation of Wealth
and Wealth Transfers, in: James Mirrlees et al. (eds.), Dimensions of Tax Design. The
Mirrlees Review, Oxford University Press, 737-836.
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