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Long‐Run Implications of Social Security Taxation for Growth and Fertility

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  • Jie Zhang

Abstract

This paper compares long‐run implications for growth and fertility of four types of taxation for social security with positive bequests. A tax rise under lump‐sum taxation enhances growth but lowers fertility, while other types of taxation do so under additional restrictions. A tax rise under consumption taxation is less likely to stimulate growth and to reduce fertility than under payroll taxation. A rise in an interest income tax raises fertility, reduces both savings and human capital investment, and hence is harmful for growth. The case with zero bequests is also discussed.

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  • Jie Zhang, 2001. "Long‐Run Implications of Social Security Taxation for Growth and Fertility," Southern Economic Journal, John Wiley & Sons, vol. 67(3), pages 713-724, January.
    • Handle: RePEc:wly:soecon:v:67:y:2001:i:3:p:713-724
    DOI: 10.1002/j.2325-8012.2001.tb00365.x
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