Social Spending in Korea: Can it Foster Sustainable and Inclusive Growth?
AbstractGoing forward, Korea faces two closely related challenges: sustaining economic growth against the backdrop of a rapidly aging population and ameliorating income inequality. This paper argues that a gradual increase in social spending could promote more sustainable and inclusive growth in Korea. In particular, simulation results suggest that social spending which supports labor market reforms can boost longer-term growth. However, despite rapid increases recentlyâ€”albeit from a low baseâ€”there is still a social spending gap relative to Koreaâ€™s OECD peers. Because of several fiscal challenges in the coming decades, increases in social spending should be incremental, and would be usefully guided by a longer-term fiscal framework.
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Bibliographic InfoPaper provided by International Monetary Fund in its series IMF Working Papers with number 12/250.
Date of creation: 19 Oct 2012
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This paper has been announced in the following NEP Reports:
- NEP-ALL-2013-02-16 (All new papers)
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