Inequalities in living standards between generations in France.

Summary In this paper, age (or life-cycle) and generation effects on living standards are estimated from a pseudo-panel constructed with the different editions of the Family Budget Survey between 1979 and 2011. Households' standard of living is assessed with disposable income or private consumption per consumption unit, with or without isolating housing expenses and implicit rents. Using the identification strategy developed by Deaton and Paxson (1994) for age-period-cohort (APC) models, two main results are highlighted. First, the standard of living increases sharply with age, from 25 to 64 years. For example, the consumption of 50-54 year olds is 35% higher than that of 25-29 year olds. From the age of 65, the evolution depends on the standard of living indicator considered. Moreover, the standard of living of the baby-boom generations is higher than that of the generations born before the war, but lower than or equal to that of the generations that follow them. For example, the consumption of the 1946-born cohort is 40 percent higher than that of the 1926-born cohort but 20 percent lower than that of the 1976-born cohort. Taking all cohorts born between 1901 and 1979 together, no generation was at a disadvantage relative to its elders. The discussion of these results, particularly in relation to those of other identification strategies - the age-period-cohort-detrended (APCD) method, which removes a linear trend from the variables, and an original strategy, the life expectancy-period-cohort (LEPC) method, which replaces the age variable with life expectancy at each age - highlights their robustness. It reveals the importance of economic growth in raising the standard of living of the generations and confirms that no generation has had a lower consumption than the generations that preceded it.