Publications
55 results found
McCarthy D, Sefton J, Lee R, et al., 2022, Generational Wealth Accounts: did public and private inter-generational transfers offset each other over the financial crisis?, The Economic Journal, Vol: 132, Pages: 2412-2437, ISSN: 0013-0133
We develop Generational Wealth Accounts (GWA): the first set of balance sheets, broken down by generations, to include all human capital, tangible wealth, financial wealth, and transfer wealth, and the uses to which these resources are put. We then use them to measure the size, nature (public or private; capital or current) and direction of inter-generational transfers and assess the sustainability of public and private consumption plans. We confirm that public sector consumption in the UK is unsustainable but show that the private sector is close to balance. Aggregate consumption plans are therefore unsustainable. Although public sector finances worsened significantly over the crisis, the private sector balance improved and capital transfers to the young increased, more than fully offsetting this deterioration. We find that increases in house prices redistributed resources away from the young and towards the old but had little effect on overall sustainability.
Mason A, Lee R, Sefton J, 2022, Six ways population change will affect the global economy, Population and Development Review, Vol: 48, ISSN: 0098-7921
New estimates of economic flows by age combined with population projections show that in the coming decades 1) global GDP growth could be slower by about 1 percentage point per year, declining more sharply than population growth; 2) GDP will shift towards sub-Saharan Africa more than population trends suggest; 3) living standards of working-age adults may be squeezed by high spending on children and seniors; 4) changing population age distribution will raise living standards in many lower income nations; 5) changing economic life cycles will amplify the economic effects of population aging in many higher income economies; and 6) population aging will likely push public debt, private assets, and perhaps productivity higher. Population change will have profound implications for national, regional and global economies.
Miles D, Sefton J, 2021, House prices and growth with fixed land supply, The Economic Journal, Vol: 131, Pages: 1815-1848, ISSN: 0013-0133
We analyse housing costs and patterns of residential development over the long term in a dynamic general equilibrium. We show that in a growing economy the speed of travel improvements is crucial to the evolution of land and house prices. We derive a condition for the rate of change in transport efficiency that generates flat land and house prices on a balanced growth path. We present evidence that this condition was satisfied in many countries between the mid-nineteenth century and the mid-twentieth century, but since then passenger transport improvements have slowed down with major implications for how house prices evolve.
Scowcroft A, Sefton J, 2019, Understanding momentum, FINANCIAL ANALYSTS JOURNAL, Vol: 61, Pages: 64-82, ISSN: 0015-198X
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- Citations: 26
McCarthy D, Lee R, Sefton JA, et al., 2017, Full generational accounts: what do we give to the next generation?, Population and Development Review, Vol: 43, Pages: 695-720, ISSN: 0098-7921
Lee R, Mason A, members of the NTA Network, 2014, Is low fertility really a problem? Population aging, dependency, and consumption., Science, Vol: 346, Pages: 229-234, ISSN: 1095-9203
Longer lives and fertility far below the replacement level of 2.1 births per woman are leading to rapid population aging in many countries. Many observers are concerned that aging will adversely affect public finances and standards of living. Analysis of newly available National Transfer Accounts data for 40 countries shows that fertility well above replacement would typically be most beneficial for government budgets. However, fertility near replacement would be most beneficial for standards of living when the analysis includes the effects of age structure on families as well as governments. And fertility below replacement would maximize per capita consumption when the cost of providing capital for a growing labor force is taken into account. Although low fertility will indeed challenge government programs and very low fertility undermines living standards, we find that moderately low fertility and population decline favor the broader material standard of living.
Sefton J, van de Ven J, 2009, Optimal Design of Means Tested Retirement Benefits*, ECONOMIC JOURNAL, Vol: 119, Pages: F461-F481, ISSN: 0013-0133
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- Citations: 12
Sefton JA, Van de Ven J, Weale M, 2008, Means Testing Retirement Benefits: Fostering Equity or Discouraging Savings?, Economic Journal, Vol: 118, Pages: 556-590
Kirsanova T, Sefton JA, 2007, A comparison of national saving rates in the UK, US and Italy, European Economic Review, Vol: 51, Pages: 1998-2028
Sefton J, Weale M, 2006, The concept of income in a general equilibrium, Review of Economic Studies, Vol: 73, Pages: 219-249, ISSN: 0034-6527
Cavaglia S, Sefton J, Scowcroft A, et al., 2006, Global Style Investing, The Journal of Portfolio Management, Vol: Summer
Sefton J, Ven J, Weale M, 2005, Means testing and retirement choice in Europe: a comparison of the British and Danish systems, Fiscal Studies, Vol: 26, Pages: 83-118
We develop a simulation model of household behaviour in which both the consumption/saving and labour/leisure choices are endogenous. This model is used to explore the effects of the UK and Danish state tax and benefit systems on the labour supply of workers aged 50 or over. We find that, in broad terms, differences in labour force participation can be accounted for by differences in benefit structures. Furthermore, our simulations suggest that the UK system is preferred by young people while the Danish arrangement which imposes a larger tax burden and provides larger welfare benefits is chosen by people of 50 or older. Notably, people older than 60 are in the majority in the simulated population. The Danish system does not promote notably greater equality over the lifetime, but it does underpin a higher level of consumption for people of 50 or older.
Sefton J, van de Ven J, 2004, Simulating household savings and labour supply: an application of dynamic programming, National Institute Economic Review, Pages: 56-17 pages, ISSN: 0027-9501
Sefton J, Weale MR, 2004, Individual and national income in general equilibrium (Discussion Paper), TBS/DP04/8
Sefton J, Scowcroft A, 2004, A decomposition of portfolio momentum returns (Discussion Paper), TBS/DP04/9
Miles D, Sefton J, 2003, Social security design in the UK: What is optimal?, FISCAL STUDIES, Vol: 24, Pages: 121-151, ISSN: 0143-5671
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- Citations: 2
Dutta J, Sefton J, Weale M, 2003, Education and public policy, The economics of public spending, Editors: Miles, Myles, Preston, Miles, Myles, Preston, Oxford, Publisher: Oxford University Press, Pages: 121-152, ISBN: 9780199260324
Kirsanova T, Sefton J, Weale MR, 2002, Playing the Generation Game: a re-examination of saving behaviour around retirement
We explore how men's hourly wages and the consumption and income patterns of households headed by men aged 53-67 evolve as the men age towards retirement and cross the retirement threshold. We make use of cross-section data from the Family Expenditure Survey and Family Resource Survey, but check for sample selection bias in our estimates of hourly wage movements using data from the British Household Panel Survey. We find that households including men entitled to occupational pensions, and particularly those headed by men who stayed at school beyond 16, are largely able to smooth their consumption across the retirement threshold. Relevant households with no access to occupational pensions show sharp falls in consumption on retirement.
Cantor ACM, Sefton JA, 2002, Economic applications to actuarial work: personal pensions and future rates of return, British Actuarial Journal, Vol: 8, Pages: 91-131, ISSN: 1357-3217
Miles DK, Sefton J, 2002, Optimal social security design, Discussion Paper Series - Centre for Economic Policy Research London, Pages: ALL--, ISSN: 0265-8003
Scowcroft A, Sefton J, 2001, Do tracking errors reliably estimate portfolio risk?, Journal of Asset Management, Vol: 2, Pages: 205-222
Dutta J, Sefton JA, Weale MR, 2001, Income distribution and income dynamics in the United Kingdom, Journal of Applied Econometrics, Vol: 16, Pages: 599-19 pages, ISSN: 0883-7252
Gokhale J, Kotlikoff LJ, Sefton J, et al., 2001, Simulating the transmission of wealth inequality via bequests, Journal of Public Economics, Vol: 79, Pages: 93-128, ISSN: 0047-2727
Sefton JA, Cardarelli R, Agulnik P, 2000, The UK pensions green paper: A generational accounting perspective, Economic Journal
Cardarelli R, Sefton J, Kotlikoff LJ, 2000, Generational Accounting in the UK., The Economic Journal, Vol: 110
This paper presents the first set of generational accounts for the United Kingdom. We find that under our baseline scenario, in which pensions are price indexed and health expenditure grows modestly, the imbalance in UK generational policy is small when compared with other leading industrial countries like the United States, Japan, and Germany. However, under an alternative policy scenario, where all social benefits are wage-indexed and health care spending is increased, there is a larger fiscal bill left for future generations to pay. In this case, achieving generational balance would require much stronger medicine.
Sefton JA, 2000, Solution method for consumption decisions in a dynamic stochastic general equilibrium model, Journal of Economic, Dynamics and Control
Dutta J, Sefton J, Weale MR, 2000, Capital Income Taxation and Public Choice
The supply-side argument that taxes on income from capital are distortionary and therefore reduce welfare is widely accepted by economists. We conduct an analysis of taxation of income from capital in a dynamic general equilibrium model. We show that, when young people face liquidity constraints, they favour taxation of income from capital, because it allows them to defer part of their of their tax bills to a point at which they can afford to pay them. Old people, on the other hand favour a shift from taxation of capital to taxation of labour and, with the population structure implied by the 1991 life table this is sufficient to provide a majority against taxation of income from capital. The outcome of a plebiscite differs from the choice made by a benevolent social planner because the former does not take into account the votes of those not yet born. We show that, if young people receive resources such as bequests at the start of their working lives, this alleviates their wealth constraint and changes the welfare implications of tax on income from capital. We also show that the outcome of a vote on capital income taxation is sensitive to the life-expectancy of the population.
Sefton JA, Weale M, Dutta J, 1999, Education and public policy, Fiscal Studies, Vol: 20, Pages: 351-386
Sefton JA, in't Veld JW, 1999, Consumption and wealth: An international comparison, Manchester School
Sefton JA, Cardarelli R, 1999, Rolling back the UK welfare state?, European Economy
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