Measuring Economic Lifecycle and Flows across Population Age Groups : Data and Methods in the Application of the NTA in the Philippines

The age structure of the population of the Philippines, as in many developing countries in the world, will be experiencing significant changes in the next four decades. These changes can have potentially important implications on economic development. Many studies in the Philippines have examined the population-development linkages. The National Transfer Accounts (NTA) offers another way to examine these links. In the NTA the interaction among population age structure, economic lifecycle behavior and systems for intergenerational support, and their potential implications on the accumulation of wealth, rates of economic growth and generational equity are examined. An important feature of the NTA is the central role played by intergenerational transfer of resources in explaining the link between population and development. The main purpose of this paper is to provide an overview of the NTA system and then describe the methods and data used in the application of NTA in the Philippines. The NTA system is consistent with the System of National Accounts. It provides methodologies for assigning labor earnings and consumption to population age groups, and for estimating reallocation or transfer of economic resources across age groups. Age reallocations are generally from the working age groups to children and the elderly. Data sources for the estimation of components of the NTA Flow Accounts for the Philippines include National Income Accounts, National Health Accounts, National Education Expenditure Accounts, household income and expenditure surveys, and government finance documents. Some Philippines NTA results are presented as examples, specifically the age profiles of current consumption (C), labor income (YL) and the life cycle deficit (LCD). Three other papers in the PIDS Discussion Paper Series present more detail on results and analyses of Philippines NTA Flow Account estimates.