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Provincial Transfer Accounts: Generational Economy in Punjab, Sindh, Khyber Pakhtunkhwa and Balochistan

Publication Year : 2023

1. INTRODUCTION

While the national-level analysis of National Transfer Accounts (NTA) provides valuable insights into the generational economy and its macroeconomic implications, a more granular understanding of the provincial dynamics is essential for effective policymaking in Pakistan. Each province in the country exhibits unique demographic patterns, economic structures and social contexts, which necessitate a localized examination of the generational economy. The passage of the 18th Amendment of the constitution devolved many major subjects to the provinces, including health and education, making such a disaggregated estimation imperative.

To fully harness the benefits of the ongoing demographic transition and the potentials provided by the ‘demographic dividend’, policymakers in Pakistan must be equipped with accurate and province-specific data on the age structure changes and their economic consequences. This information is crucial for making informed decisions and allocating public resources optimally to leverage the advantages presented by the changing age structures.

By adopting the NTA framework at the provincial level, policymakers can gain deeper insights into the wealth flows occurring within each province’s population, allowing for a more nuanced understanding of the generational economy. The provincial NTA[1] analysis enables the construction of accounts that measure how individuals across different age groups within a specific province produce, consume and share resources, at both private and public levels.

Understanding the province-specific economic lifecycless, consumption patterns, and resource utilization is paramount for designing tailored public policies. By examining the age-specific needs, challenges, and opportunities within each province, policymakers can formulate targeted strategies in areas such as healthcare, education, social protection, gender equality and economic development. Furthermore, the provincial NTA analysis sheds light on the implications of population aging and generational equity within the specific context of each province, offering valuable insights into the provinces’ long-term economic sustainability.

By conducting a detailed analysis of the generational economy at the provincial level, this report aims to provide policymakers with the necessary information to make evidence-based decisions that address the unique demographic and economic challenges faced by each province in Pakistan. The findings from the provincial NTA analysis will contribute to a more nuanced understanding of the provincial economies, facilitate effective resource allocation, and foster inclusive and sustainable development across all regions of the country.

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[1] The current study is the application of the National Transfer Accounts methodology at the provincial level, so it is not ‘national’ per se. We will, however, use the term NTA, instead of PTA (provincial transfer account) because it is basically the NTA framework that is being used in the study to understand the provincial generation economy.

2. OBJECTIVES

The objective of this report is to conduct a comprehensive analysis of the National Transfer Accounts (NTA) at the provincial level in Pakistan. By focusing on the provinces, we aim to provide a deeper understanding of the linkages between population dynamics, economic development, and their economic implications for each region within the country.

This analysis will incorporate the most recent demographic data, labour market information and household surveys to ensure accuracy and relevance in capturing the current economic landscape of each province.

The specific objectives of this provincial NTA analysis are as follows:

  1. Estimating age-specific economic indicators: By utilizing the NTA framework, we will estimate age-specific economic indicators, such as income, consumption, lifecycle deficits, and reallocations for each province. These estimates will provide insights into how individuals at different stages of life contribute to and benefit from the economy within their respective provinces.
  1. Assessing interprovincial disparities: By comparing the NTA indicators across provinces, we will identify variations in economic behaviours and resource flows. This analysis will shed light on interprovincial disparities in terms of income generation, consumption patterns, and intergenerational resource transfers. Understanding these disparities will help policymakers tailor region-specific strategies to address the unique challenges and opportunities in each province.
  1. Analysing public and private resource allocations: The NTA analysis will focus on quantifying the contributions of public and private sources in filling any existing deficits, wherever possible, particularly among age groups that consume more than they produce. By examining the mechanisms through which income is reallocated and transferred between generations within each province, we can identify the role of familial support systems, government programs, and market dynamics.
  1. Informing provincial policy interventions: The findings of the provincial NTA analysis will serve as a valuable resource for policymakers at the provincial level. The insights gained from this analysis can inform the design and implementation of policies and interventions that address the specific needs and challenges faced by different age groups within each province. These policies may encompass areas such as healthcare, education, social protection, and economic development, taking into account the unique demographic and economic characteristics of each region.
  1. By conducting a provincial-level NTA analysis with updated data, this report aims to provide policymakers, researchers, and stakeholders with a deeper understanding of the generational economy within Pakistan’s provinces. The findings will contribute to evidence-based decision-making and facilitate the development of targeted policies and strategies that promote inclusive economic growth, intergenerational equity, and sustainable development at the provincial level.

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