Equity and systems of intergenerational transfers in Latin America and the Caribbean.

Any analysis of equity must include a consideration of intergenerational transfers in society. In this piece we will discuss these transfers within the context of rapid population aging in Latin America and the Caribbean. There are two main types of intergen-erational exchanges: 1) intrafamilial transfers and 2) formal intercohort transfers. Along with personal savings and other assets, these two mechanisms can affect the cycle of work and retirement. In theory, individuals plan and save during their working years in order to accumulate enough assets for their years of retirement and/or disability. If the work period has been too short or the work income too low, however , individuals will generally need other assets to support themselves during their nonworking years. Intrafamilial intergenerational transfers involve direct transfers from one generation to another via family connections. Family ties secure the claims of one group of individuals on the goods or services produced and delivered by other family members. When the family is unable to produce sufficient goods or services to meet the demands of all family members, then family assets have to be augmented. In addition to the transfer of goods and services, these intrafamilial transfers include emotional and moral support, personal companionship, and other intangibles. The mechanisms for these in-trafamilial transfers are not always stated explicitly. Instead, the mechanisms are frequently worked out according to the availability of kin and the expectations of how limited resources are to be distributed among generations within a family. In the case of poor families, the balance is often tilted in favor of the younger generation, and the burden of old age care becomes a major stress if there is not additional support from the broader society. The second intergenerational transfer mechanism consists of formal intercohort transfers via State-mediated institutions, primarily through taxation and other income redistribution schemes. These transfers are regulated by explicit laws and enforced by government agencies. When resources at the national level are insufficient to meet the needs of all generations and the number of working age persons contributing to the pool of resources is relatively small, the distribution of resources raises important ethical questions regarding e q u i t y. In most societies, economic support of the " nonworking " members of society (usually children