Time for intergenerational justice: estimation of an index of intergenerational equity in Italy

At the light of clear intergenerational imbalances exacerbated by large public debts, unstable pension systems and alarming changes of the Earth’s climate, some solutions need to be identified in an attempt to reduce their negative legacy on future generations. For instance, education and, in particular, economic-financial literacy can facilitate the comprehension by the presently living cohorts of the complicated ties that connect one generation to another. The aforementioned studies by Boeri and Tabellini (2012) and by Fornero and Lo Prete (2019) show that a higher level of information about how pension systems work and a higher degree of economic-financial literacy can increase voters’ support towards structural reforms of the social security scheme, as well as reduce politicians’ incentives not to address the issue of pension debt.
Furthermore, stronger fiscal rules can also limit the political initiatives aimed at satisfying very specific requests by some age groups: Bonfatti and Forni (2017) provide evidence that fiscal rules can hinder the “political budget cycle”, i.e. the expansion of government spending or deficit (or the decreases in taxes) in periods close to elections when incumbent politicians try to finance actions that will assure their re-election. The study by Bonfatti and Forni (2017) demonstrates that political budget cycles exist at the local level in Italy and that they have been reduced with the introduction, in 1999, of the Domestic Stability Pact, which requires subnational authorities to reach fiscal targets.
In addition, another highly accredited solution in the international literature is related to voting and to the idea that vote enfranchisement can guarantee better representation of younger citizens in the decision-making process: in fact, a 1987 report by the UN World Commission on Environment and Development highlighted that states act as they do because future generations have no financial and no political power and, therefore, the resolution of their needs depends on the actual concerns of current generations. In Italy, for example, there are approximately 10 million individuals (over a population of about 60 million citizens) who are not allowed to vote, and yet they are the ones more concerned about the future, as explained by Giavazzi (2019).
Moreover, according to a 2018 report by the Inter-Parliamentary Union (Youth participations in national parliaments, 2018), Italy ranks eleventh in the international classification of countries with members of single and lower chambers under the age of 30 (6.59% of Italian MPs were less than 30 years old in 2018), while only 2.2% of the world’s MPs are aged under 30. Moreover, 65% of the world’s chambers require a “waiting time” between voting age and age of eligibility (Inter-Parliamentary Union, 2018): in Italy, this is equal to 3 years for the Chamber of Deputies (against an average waiting time of 3.4 years) and to 15 years for the Senate (against an average of 9.7 years). The low degree of representation of younger voters and, in particular, of future cohorts is, according to Forni (2013), the main reason behind the worsening of the relative economic position of the youngest citizens in Italy, together with a short vision of Italian public officials who have promoted economic policies deemed intergenerationally unfair in the past.
Vote enfranchisement and a reduction of the age of candidacy would, therefore, ensure that the interests of the youngest, who care about unemployment and economic growth, are not undermined by the needs of citizens closer to retirement or already retired, who, instead, are more concerned about the trend of consumer prices (Boeri and Galasso, 2007). As a result, increasing representation of future generations may facilitate the introduction of regulations aimed at fostering intergenerational fairness by, for instance, reducing public deficits, improving pension systems and addressing the climate crisis.