Intergenerational income distribution before and after the great recession: winners and losers

Abstract

Ageing process may affect intergenerational relations in different ways, including income distribution. Simultaneously, the global economy has undergone various crises. An important question is whether these crises impact the nexus between ageing and intergenerational income distribution. Finding an answer to this question is difficult in the literature; although the crisis-income inequality nexus is quite often investigated, this is not in the intergenerational context. This paper attempts to solve such puzzles using data covering 13 OECD countries in the period 1995–2018. The findings show that the relationship between the age structure of the population and intergenerational income distribution before and after the Great Recession of 2007–2009 was quite different. Actually, the Great Recession seems to have triggered this nexus in such a way that the elderly won the intergenerational income game in the aftermath of the crisis; however, the working-age and younger cohorts took a rematch later. The results obtained may support the political decision-making how to cope with economic crises, including the present COVID-19 pandemic and its impact on the economy and society, so as to treat different generations fair.