On 26 June 2012, the Intergenerational Foundation marked the formal launch of the Intergenerational Fairness Index, representing the first attempt which has ever been made to systematically measure intergenerational unfairness across time by tracking a range of indicators.
The index works by examining data from nine areas which involve some form of contract between the generations – including housing, government debt, the burden of paying for pensions, and the environment – and then combining the numbers from each area to produce an overall measure of intergenerational fairness.
One or more metrics (things which could actually be measured) was found for each of these areas; for example, intergenerational fairness in unemployment was measured by comparing the proportion of young people who were out of work with the UK average for all age groups.
Data for each metric was assembled going back to 1990, and then a statistical formula was applied to the entire data-set which produced an overall value for the index.
The index was designed in such a way that for the year 2000 it had a level of 100, and then the data for each subsequent year was applied to the formula so we could observe how the picture changed as time progressed.
The results (the last year for which all the data was available):
- The IF index of intergenerational unfairness has deteriorated sharply over the last decade. Starting at a level of 100 in the year 2000 the index has risen to a level of 128, based on the latest available data, indicating a much greater burden now being placed on younger people.
- The rise has been most pronounced since the financial crisis of 2008 – since then the index has worsened by 6–7 points each year, whereas previously the worsening averaged about 2 points each year.
- Overall between 1990 and 2010 our index shows that unfairness has steadily increased with the index rising from 84 to 128.
- The IF index highlights that whilst government borrowing and pension debt have increased steadily, there has also been an increased shift in favour of the older generation through higher charges for education, rising youth unemployment and high housing costs.