What if there was more fairness in society and, for those in greater need, education, healthcare and pensions were more accessible?
These are questions national inclusion accounts (NIAs) try to answer, while seeking to address inequity as economies grow and populations age.
The Asia-Pacific region has experienced rapid socioeconomic development and demographic change over recent decades. Currently, more people of different ages are living together for longer than ever before, reshaping both opportunities and challenges for intergenerational solidarity.
National transfer accounts (NTAs) measure resources flows between generations. Building upon this methodology, NIAs go beyond age-disaggregated economic flows to consider differentials in income group, education level, urban-rural residence and family structure.
NIAs help deliver on global development frameworks, like the 2030 Agenda for Sustainable Development and the Pact for the Future, with clear calls to leave no one behind, and systematically embed long-term and intergenerational perspectives into decision-making at all levels. They also align with the Madrid International Plan of Action on Ageing objective to build societies for all ages. NIA insights can identify and target deeper issues affecting growing numbers of older persons in the Asia-Pacific region, including income insecurity, loneliness and digital exclusion.
Using the most recent NIA data from Lao People’s Democratic Republic, Maldives and Viet Nam as a solid evidence base, challenges and opportunities can be more clearly understood, resulting in better-informed policymaking. In all three countries, per capita total public transfers (all education, healthcare and pension transfers) show similarities and an overall promising picture. These are plotted relative to household income per capita across age and income quartiles. Shifting perspectives from absolute amounts to relative shares sheds light on significantly different—and more progressive—distributional patterns of public resources.
The below age profiles display life-cycle patterns fully consistent with the NIA framework. During childhood, ratios of public transfers relative to income are substantial. This reflects the predominance of publicly-financed education and healthcare at ages with negligible individual income. At working ages, increasing labour income means the relative importance of public transfers falls. These remain low across all income quartiles throughout adulthood, then increase at older ages due to pensions and healthcare.
In all three countries, the lowest income quartile (Q1) consistently receives the greatest ratio of public transfers to per capita income at almost every age, especially during childhood and teenage years. Conversely, the highest income quartile (Q4) shows the lowest relative public transfers at most ages.
This progressivity reveals that, despite the ongoing pro-rich nature of absolute transfers, public transfer systems play crucial redistributive roles in supporting life-cycle deficits among the most economically vulnerable people, including older persons (as clearly seen in Maldives).
However, while all three countries achieve near‑universal equity regarding primary education, tertiary education spending remains disproportionately captured by students from higher‑income backgrounds. This characteristic is observed across the Asia-Pacific region.
Considering health, more could be done, such as explicitly tying budget allocations to primary healthcare and prevention in underserved areas. This could reduce later-life curative costs and help equalize access.
Concerning pension systems, further reforms are needed to balance fairness, adequacy and fiscal sustainability, given population ageing. This could be achieved through pay-as-you-go pension structures with built-in automatic stabilization mechanisms that adjust taxes and benefits as population age.
Another possibility to improve productivity, well-being, equity and revenue is raising retirement ages, along with allowances for different education levels, incomes or occupational groups. Lower-income individuals often have shorter life expectancies and hence should have earlier retirement ages. There should also be provisions for women and persons with disabilities, and investments in health to help people live longer and healthier lives.
Given geographic and other barriers—particularly severe in Maldives’ outer atolls and in remote areas of Lao People’s Democratic Republic—investments in connectivity and digitalization are required to overcome gender, age-based or other digital divides.
In many instances, increased public transfers are required, given living costs and inflation. Moreover, private capital plays significant roles, such as allowing individuals in higher-income quartiles to access higher quality education and health, and more substantial pensions. In this regard, innovative financing, including blended finance, could complement public spending.
NIA estimates can help simulate long-run costs and equity implications of economic scenarios and possible reforms, allowing policymakers to choose the most sustainable options. In this context, robust data infrastructure is essential, along with advocacy to mainstream NIA tools in policy planning and integrate them into national statistical systems. This can enhance understanding of economic and fiscal impacts of demographic change, and promote more inclusive and sustainable fiscal planning.
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This article is part of a series of blogs prepared for the Fifth Asia-Pacific Review and Appraisal of the Madrid International Plan of Action on Ageing.
