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

3 
INTRODUCTION 
In November 2019, a young Member of the New Zealand Parliament, Chlöe 
Swarbrick, was interrupted by an older lawmaker during her speech in support for the 
Zero Carbon bill, which was aimed at reducing carbon emissions in New Zealand by 
the year 2050. The 25-year-old representative of the Green Party quickly replied to the 
opposition spokesman with the phrase “OK Boomer” and then kept talking about the 
effects of climate change on the lives of younger generations. Her remark was 
immediately reported by the media and the episode became famous around the world. 
Since then, the catchphrase gained even more popularity and it is now used to 
promptly dismiss ideals and attitudes of the elderly, especially those attributed to baby 
boomers. It is a pejorative reply to individuals denying climate disruption, opposing 
technological change and obstructing the issues, needs and goals that matter to 
younger groups.  
The spread of the “OK Boomer” phenomenon, which today counts more than 
250,000 posts on Instagram and several brands producing t-shirts and sweatshirts with 
this phrase, can be conceived as a symptom of the increasing resentment by the 
members of Generation Z and Millennials towards previous generations, which are 
deemed responsible for many of the problems that current and future cohorts will 
confront in the years ahead. Some examples include public debt, pension debt and 
environmental concerns, which seem to be severe both in advanced and developing 
countries: indeed, generational angst, the fear that enormous fiscal bills will be passed 
on future generations, is global and it characterizes countries that are very different 
one with another, like Brazil and Japan. As pointed out by Kotlikoff and Leibfritz (1999), 
this angst is rooted in the accumulation of large official and unofficial liabilities, and in 
demographic changes, especially aging.  
It is in this wide context that the issue of intergenerational justice has been 
gaining importance and it is now considered a crucial component of sustainable 
development. At the same time, however, both advanced and developing countries 
seem to be characterized by institutional constraints and political incentives that limit 
the willingness of part of the electorate, as well as of some parties, to promote the 
introduction of policies that are more equitable from an intergenerational perspective:
4 
one reason for this is the lack of political and financial power of the younger cohorts, 
whose interests and needs are subject to the actual preferences of present 
generations. For example, in terms of pension reforms, Bello and Galasso (2018) 
explain that there exist precise groups, including individuals close to retirement, that 
may oppose policies postponing the retirement age. This implies that there is a strong 
individualistic attitude dissipated among the older cohorts that hinders any effort to 
make policies more sustainable and intergenerationally equitable. It is, therefore, 
essential to identify some suitable ways that may bring the issue of intergenerational 
justice at the attention of the public opinion, otherwise, as argued by Kotlikoff and 
Leibfritz (1999:97), “countries that take no action to achieve generational balance will 
find their generational imbalances worsening over time” at the expenses of future 
cohorts. 
One other reason that may explain why intergenerational fairness has been left 
at the margins of the public debate is the absence of indicators that can quantify the 
degree of inequality across generations: in fact, differently, for instance, from income 
inequality, the issue of intergenerational justice is influenced by several factors, which 
make the construction of a comprehensive and accurate measure an ambitious 
challenge. Despite of that, in 2013 the Association of Junior Chambers of Commerce 
of Québec (RJCCQ) developed the Québec Index of Intergenerational Equity, which 
was released in March 2014 by L'actualité magazine. The most recent edition dates 
back to March 2016 and it has been promoted by a team of researchers (The 
Generations Institute, Canada). According to their report, the index can assess the 
evolution of intergenerational equity in Québec and Ontario by combining thirty 
indicators, which are mainly focused on young people aged 25 to 34.  
At the light of the increasing concerns about intergenerational equity, the aim of 
this paper is precisely that of discussing some of the aspects determining the unfair 
distribution of resources across generations with particular emphasis on public debt, 
pension systems and climate change. The report can be divided in two parts: the first 
section will be devoted to an analysis of the existing literature related to these topics 
and with special reference to the Italian case. The last section, instead, will concern 
the application of the Index of Intergenerational Equity to Italy in an attempt to measure
5 
its evolution over time and to understand what has been the impact of political choices 
and public policies on the quality of life and resource-sharing of younger cohorts.  
  
THE ISSUE OF INTERGENERATIONAL JUSTICE 
A recent report by the UN Secretary-General (Intergenerational solidarity and 
the needs of future generations, 2013) provides a precise definition of intergenerational 
justice, which can be understood as fairness in the intertemporal distribution of 
endowments from a distributive, procedural, restorative and retributive perspective. It 
also makes clear that the fair allocation of benefits and burdens across generations is 
a crucial component of sustainable development. The UN General Assembly has, 
therefore, recognized that “satisfying the needs of the present generation should not 
come at the expense of generations to come” (UN Secretary-General, 2013:08). The 
2013 report also praised the creation of national offices established in countries like 
Canada, Finland, Hungary, Israel, New Zealand and aimed at protecting the needs of 
future generations. This initiative is particularly meaningful in political systems where 
younger cohorts have no chance to influence policies and decisions made by 
lawmakers that are usually older and that, for electoral reasons, are more involved in 
the formulation of short-term policies addressing the interests of the elderly cohorts.  
On the other hand, some scholars have argued that the principle of 
intergenerational justice would be very difficult to apply and, indeed, the concept has 
been subject to harsh debates, which raise not only juridical issues, but also 
philosophical controversies. For instance, Ludovico (2019) illustrates the tension 
between the Rawlsian contractualist theory and the utilitarian view: while the former is 
based on the idea that each generation should save some resources for future cohorts 
in order to ensure the preservation of a just society, the latter claims that current 
generations should bear the burden to guarantee the greatest possible well-being for 
subsequent generations. Ludovico (2019) also argues that the main limitations of the 
notion of intergenerational equity can be attributed to its various application criteria and 
to its multiple influencing factors. As an example, the author explains that, while the 
principle of solidarity is embedded in the Italian Constitution, the balance of the Italian
6 
pension system has been made unstable by the presence of a tacit principle of 
intergenerational solidarity in its pay-as-you-go scheme.  
Generational imbalance is the reason behind many of the economic troubles 
faced by both advanced and developing countries today: for instance, Willetts (2011) 
claims that the failure to value and understand the ties and contracts between 
generations has led to low savings, considerable deficits and environmental 
degradation, which all have a clear economic impact on the present economy. 
Nevertheless, as pointed out by Kotlikoff and Leibfritz (1999), these policies will also 
penalize future generations with extremely large rates of net taxation. This prediction 
has been developed with a method of long-term fiscal analysis and planning, which is 
usually referred to as generational accounting: as explained by Auerbach, Kotlikoff and 
Leibfritz (1999), this approach was introduced in the 1990s (when the rapid population 
ageing started to be observed) and it can be useful to assess the appropriateness of 
fiscal policy and quantify the fiscal strains facing current and future generations. In 
addition to the possible developments of single policies, generational accounting takes 
into consideration the future demographic structure of the economy: in fact, population 
totals of present groups are a key component in establishing the contribution of current 
generations in paying the government’s bills. Similarly, projected population totals of 
future generations are crucial in measuring the burden per future individual of covering 
the bills left unpaid by the previous cohorts (Auerbach, Kotlikoff and Leibfritz, 1999). In 
a perspective of intergenerational justice and fairness, generational accounting can 
help understand that generations born in the future will be confronted with a 
significantly larger lifetime net tax rate than that of current generations if national 
governments fail to address the status quo policies with the introduction of future-
oriented reforms.  
There are at least three issues to which policymakers should devote effort 
urgently, as their economic impact on the lives of future cohorts seems to be serious 
and considerable. Hence, the long-term negative effects on intergenerational equity  of 
excessive public debt, unsustainable pension systems and climate disruption, which 
are well documented in the international economic literature, will be discussed in the 
sections that follow.